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Budget FY23: Cigarettes to become costlier

Prices of bidi to stay as they are

The government plans to increase cigarette prices in order to reduce tobacco product consumption and maximize revenue collection from this sector.

Finance Minister AHM Mustafa Kamal read out the proposals for the 2022-2023 fiscal year in parliament on Thursday.

The minimum price of 10 sticks of low-tier cigarettes will be Tk40 (a Tk1 increase from the previous fiscal year), with a supplementary duty of 57%, according to the minister’s proposals.

The minimum price of mid-tier cigarettes (10 sticks) will be Tk65 (a Tk2 hike), high-tier cigarettes Tk111 (a Tk9 hike) and premium-tier cigarettes Tk142 (a Tk7 increase), with a supplementary duty of 65% for the three tiers.

But the prices of bidi will remain as they are.

The minimum price of 25 sticks of handmade bidi is Tk18. Twelve sticks of bidi cost Tk9 and eight sticks of bidi Tk6 – with a supplementary duty of 30% for all three.

The price of filter-tipped bidi is Tk19 for 20 sticks and Tk10 for 10 sticks, with a supplementary duty of 40% for both.

Also, the prices of jarda – Tk40 for 10gm – and gul – Tk20 for 10gm – will remain the same, with a supplementary duty of 55% for both.

Experts seek flat 20% corporate tax for listed companies

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Estimating Own- and Cross-Price Elasticity of Cigarette Consumption by Price Tiers in Bangladesh [Working Paper Series]

This Working Paper was written by the Institute of Health Economics (IHE) in Bangladesh. The study examined the impact of the tiered price and tax system by estimating own- and cross-price elasticities of low- and high-priced brands, as well as income elasticities of cigarette consumption by price tier. Researchers find that the total elasticity (smoking prevalence and intensity) for low-price cigarettes is -0.1678. The own-price elasticity of the smoking intensity of high-price cigarette brands is -0.2512, while the cross-price elasticity of low-price cigarette consumption with respect to high-price brand prices is 0.2643. This implies that increasing the price of high-price cigarettes by 10% would increase consumption of low-price cigarettes by 2.643%, suggesting that smokers may switch to cheaper brands when faced with price increases. Therefore, increasing the price of cigarettes in the low-tier is critical to reducing tobacco use, especially since low-price brands dominate the market. On the other hand, as incomes rise, smokers are likely switching from low- to high-price brands: the total income elasticity for low-price cigarettes is -0.1370, while the total elasticity for high-price cigarettes is 1.4608. The working paper concludes with a set of recommendations for policy makers, highlighting the importance of increasing the price of the low-price cigarettes and reducing the price differential between tiers so that all cigarettes are taxed at the same rate.

A Policy Brief based on the working paper can be found here .

Location(s): Asia , Bangladesh

Project: Think Tanks Project: Accelerating Progress on Tobacco Taxes in Low- and Middle-Income Countries

Content Type: Working Paper

Topic(s): Impact on demand , Industry pricing , Tax and price , Tax levels and structure

Authors(s): Shafiun Nahin Shimul, A.K.M. Ghulam Hussain

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Bangladesh plans to push the price of cigarettes to reduce smoking and increase tax revenue.

The minimum price for 10 sticks of low-tier cigarettes will be set at Tk 39, with a supplementary duty of 57 per cent.

The minimum price of mid-tier cigarettes will be set at Tk 63, high-tier cigarettes at 102, and premium tier cigarettes at Tk 135, with a supplementary duty of 65 per cent for these tiers. 

The price hikes come as part of Finance Minister AHM Mustafa Kamal’s budget proposal for fiscal year 2021-22.

The government has decided to keep the existing prices of bidi unchanged, as per a bdnews24.com report.

Currently, the minimum price of 25-stick handmade bidi is Tk 18, Tk 9 for 12-stick bidi and Tk 6 for 8-stick bidi, with a supplementary duty of 30 per cent for all three.

The price of filter-tipped bidi is Tk 19 for 20 sticks and Tk 10 for 10 sticks, with a supplementary duty of 40 per cent for both.

The prices of Jarda, Tk 40 for 10 gm, and Gul, Tk 20 for 10 gm, will also remain the same, with a supplementary duty of 55 per cent for both.

Tobacco use caused nearly 126,000 deaths in Bangladesh in 2018, accounting for 13.5 per cent of all deaths, according to a 2020 study by the Bangladesh Cancer Society and the Dhaka University Department of Economics.

The study also found that approximately 1.5 million adults were suffering from diseases attributable to tobacco use and that tobacco-induced deaths and disease cost Bangladesh Tk 305.60 billion a year.

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Estimating own-price and cross-price elasticity of cigarette consumption by price tiers in Bangladesh

Affiliations.

  • 1 Institute of Health Economics, University of Dhaka, Dhaka, Bangladesh [email protected].
  • 2 Health Policy and Behavioral Sciences, Georgia State University, Atlanta, Georgia, USA.
  • 3 Department of Economics, University of Dhaka, Dhaka, Bangladesh.
  • 4 Tobacco Control Research, American Cancer Society, Atlanta, Georgia, USA.
  • PMID: 37903559
  • DOI: 10.1136/tc-2022-057679

Objectives: The overall price elasticity of cigarette consumption in Bangladesh has been studied extensively. The estimates of price elasticity by price tiers are not available in the existing literature.

Methods: Using cohort data of nearly 6000 individuals from the International Tobacco Control Bangladesh survey, this study estimated the own-price and cross-price elasticity and income elasticity of cigarette demand by price tiers in Bangladesh. The elasticity was estimated in three stages of consumer decisions: whether to smoke, which brand to smoke and finally, how many cigarettes to smoke per day. The decision to smoke cigarettes and the choice of cigarette brands were modelled using instrumental variable probability regression. The cigarette consumption per day was modelled using seemingly unrelated regression.

Results: The price elasticity of cigarette smoking prevalence with respect to the price of low-price cigarettes is -0.0487. The total elasticity for low-price cigarette consumption with respect to its own price is -0.1678. The own-price elasticity of smoking intensity of high-priced brands is -0.2512. The cross-price elasticity of low-price cigarette consumption with respect to high-price brand prices is 0.2643. The income elasticity of smoking prevalence overall is 0.0564. The income elasticity of daily consumption of low-price cigarettes is -0.1934 and for high-price cigarettes, it is 1.4044. The total income elasticity is 1.4608 for high-price cigarettes.

Conclusion: A cigarette tax policy that raises the prices of both low-price and high-price brands-but increases prices in the low-price tier at a faster rate than in the high-price tier and increases prices of all brands at a pace faster than income growth-can effectively reduce cigarette consumption in Bangladesh.

Jel codes: H29, L66, I18.

Keywords: economics; low/middle income country; price; taxation.

© Author(s) (or their employer(s)) 2023. Re-use permitted under CC BY. Published by BMJ.

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Essay on Light Cigarettes

Essay on Light Cigarettes

Table of Contents

The Complex Reality of Light Cigarettes

Introduction.

In the pursuit of healthier alternatives to traditional cigarettes, light cigarettes emerged as a seemingly promising option. Marketed as a “healthier” and “safer” choice, these cigarettes were introduced to address concerns about the health risks associated with smoking. However, the term “light cigarette” can be misleading. This essay delves into the history, marketing strategies, and health implications of light cigarettes, shedding light on their complex reality.

The Birth of Light Cigarettes

Light cigarettes, also known as low-tar and low-nicotine cigarettes, first appeared in the mid-20th century in response to mounting evidence of the harmful health effects of smoking. Manufacturers claimed that these cigarettes provided a milder, less harmful smoking experience, primarily by reducing the levels of tar, nicotine, and other harmful chemicals in the smoke.

Marketing Strategies

  • Misleading Labels: Light cigarettes were often labeled as having lower tar and nicotine content, creating an illusion of reduced health risks. Smokers believed they were making a healthier choice, which boosted sales.
  • Filter Technology: Manufacturers introduced filters, which were perceived as reducing exposure to harmful substances. However, many studies have shown that filters do not significantly reduce health risks, as smokers compensate by inhaling more deeply or smoking more cigarettes.
  • Flavor and Sensation: Light cigarettes often used additives to mimic the taste and sensation of regular cigarettes, making them more appealing to consumers who were trying to quit or reduce their smoking.

Health Implications

  • False Perception of Safety: One of the most significant drawbacks of light cigarettes is that they foster a false sense of safety. Smokers tend to believe that by choosing light cigarettes, they are avoiding the health risks associated with regular cigarettes. This misconception can lead to reduced motivation to quit or cut down on smoking.
  • Compensation Behavior: Smokers of light cigarettes tend to engage in compensation behavior, such as inhaling more deeply or smoking more cigarettes, to maintain their desired level of nicotine intake. As a result, the health benefits of smoking light cigarettes are often negated.
  • Health Risks Persist: Research has shown that light cigarettes are not significantly less harmful than regular cigarettes. Smokers of light cigarettes can still develop various smoking-related diseases, including lung cancer , heart disease, and respiratory disorders.

Regulations and Warnings

In response to the deceptive marketing of light cigarettes and their health implications, governments and health organizations have implemented regulations and warnings. These measures include:

  • Labeling: Cigarette packaging is required to include warnings about the health risks of smoking, regardless of whether the cigarettes are marketed as light or regular.
  • Tar and Nicotine Reporting: Some countries mandate that manufacturers report tar and nicotine levels in cigarettes, allowing consumers to make more informed choices.
  • Advertising Restrictions: Regulations limit the use of terms like “light” and “mild” in cigarette advertising, as they can be misleading.

The concept of light cigarettes emerged as a well-intentioned response to concerns about the health risks of smoking. However, the reality is far more complex. Light cigarettes have not proven to be a safer alternative to regular cigarettes, as they often lead to false perceptions of safety and compensation behaviors. As public awareness grows, and regulatory measures become more stringent, it is essential for individuals to understand the risks associated with smoking, irrespective of the type of cigarette they choose. Ultimately, the most effective way to reduce health risks related to smoking is to quit altogether or seek healthier alternatives, rather than relying on the misleading promise of light cigarettes.

Read More :  Essay on Advantages and Disadvantages of Selling Cigarettes

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Cigarettes - Bangladesh

  • In 2024, the revenue generated in the Cigarettes market in Bangladesh amounts to US$5.6bn.
  • It is projected that the market will experience an annual growth rate of 5.23% (CAGR 2024-2028).
  • When compared globally, in China generates the highest revenue in this segment, with US$282,900m in 2024.
  • Considering the total population figures, the per person revenue in Bangladesh's Cigarettes market is estimated to be US$38.33 in 2024.
  • Looking ahead to 2028, the volume in the Cigarettes market is expected to reach 79.5bn pieces.
  • Additionally, a volume growth of -0.2% is forecasted for 2025.
  • Furthermore, the average volume per person in the Cigarettes market is projected to be 0.6k pieces in 2024.
  • The cigarette market in Bangladesh is currently experiencing a shift towards lower-cost, locally produced brands due to increasing taxation and stricter regulations on imported cigarettes.

Key regions: Indonesia , United States , Singapore , Germany , Philippines

Definition:

The Cigarettes segment includes finished (filtered) Cigarettes that along with tobacco can contain additional flavourings or substitutes (e.g. coarsely ground cloves). Tobacco for rolling cigarettes is considered separately and is not included in this segment. The five most important producers worldwide are the China National Tobacco Corporation, Philip Morris International (PMI), British American Tobacco (BAT), Japan Tobacco International (JTI) and Imperial Tobacco.

Additional information:

The market comprises revenue and average revenue per capita, volume and average volume per capita, price per unit, and sales channels. To give a better representation of per capita figures, the population considered is 15 years and above. The price per unit denotes the cost of a single cigarette.

For more information on the displayed data, please use the info button right next to the boxes.

  • (Filtered) Cigarettes such as Marlboro Reds, Marlboro Golds, Camel Blues, etc

out-of-scope

  • Untaxed Cigarettes such as illicit cigarettes
  • Smoking Tobacco (RYO, pipe tobacco) such as Marlboro Gold Fine Cut Hand Rolling Tobacco, Gold Leaf Hand Rolling Tobacco, etc
  • Cigars and cigarillos such as Davidoff Nicaragua Diadema, Rock Patel Sixty Sixty, etc

Tobacco Products

  • Smoking Tobacco
  • E-Cigarettes
  • Analyst Opinion

Cigarettes represent more than 90% of the value in the traditional Tobacco Products market. The mainstay of Big Tobacco has come under heightened scrutiny from regulatory bodies and the public, which has led to an enduring decline in volume sales. Due to high levels of taxation, roughly half of all revenues go directly to the state in the form of various excise duties and sales taxes.

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Lighter Price in Bangladesh

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  • Type of Lighter: Decide between traditional flint lighters, electric, or USB rechargeable models.
  • Material and Build Quality: Choose lighters made of durable materials for longevity.
  • Brand Value: Consider purchasing from reputable brands for reliability.
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  2. PDF Price elasticity of cigarette smoking in Bangladesh: evidence from the

    the price changes. Cigarette price elasticity estimates varied across countries and over time. In a recent cross-country study, total cigarette price elasticity for 13 low and middle- income countries (LMICs) was estimated to be −0.53, with a prevalence and intensity elasticity of −0.36 and −0.17, respectively.5 For LMICs in

  3. Vape price in Bangladesh

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  4. Budget FY23: Cigarettes to become costlier

    The government plans to increase cigarette prices in order to reduce tobacco product consumption and maximize revenue collection from this sector. Finance Minister AHM Mustafa Kamal read out the proposals for the 2022-2023 fiscal year in parliament on Thursday. The minimum price of 10 sticks of low-tier cigarettes will be Tk40 (a Tk1 increase ...

  5. PDF Estimating own-price and cross-price elasticity of cigarette

    elasticity of daily consumption of low-price cigarettes is −0.1934 and for high-price cigarettes, it is 1.4044. The total income elasticity is 1.4608 for high-price cigarettes. Conclusion A cigarette tax policy that raises the prices of both low-price and high-price brands—but increases prices in the low-price tier at a faster rate than in the

  6. Tobacco consumption in Bangladesh

    "The major challenge in Bangladesh is affordability; tobacco is much cheaper than in neighbouring countries", commented Nargis. She coauthored a study that found, despite the sharp increases in the price of cigarettes in Bangladesh from 2009 to 2014-15, cigarettes became more affordable as a result of income growth. Bidis also increased ...

  7. Price elasticity of cigarette smoking in Bangladesh: evidence from the

    Endogeneity of prices was minimised using the average consumption-weighted cigarette price in a cluster, for both smokers and non-smokers residing in a specific cluster. Results: Cigarette demand was found to be price inelastic and ranged between -0.51 and -0.73. It is also price inelastic across wealth groups and areas of residence in Bangladesh.

  8. Estimating own-price and cross-price elasticity of cigarette

    The cross-price elasticity of low-price cigarette consumption with respect to high-price brand prices is 0.2643. The income elasticity of smoking prevalence overall is 0.0564.

  9. Research: Estimating Own- and Cross-Price Elasticity of Cigarette

    The own-price elasticity of the smoking intensity of high-price cigarette brands is -0.2512, while the cross-price elasticity of low-price cigarette consumption with respect to high-price brand prices is 0.2643. This implies that increasing the price of high-price cigarettes by 10% would increase consumption of low-price cigarettes by 2.643% ...

  10. (PDF) Price elasticity of cigarette smoking in Bangladesh: evidence

    The objective of the study was to estimate the price elasticity of cigarette demand in Bangladesh using Global Adult Tobacco Survey 2009 and 2017 data. Methods Smoking prevalence and smoking ...

  11. About KT&G > Brands_Export > ESSE LIGHTS

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  12. Smokers to pay more for lighting up as Bangladesh bumps up prices

    Updated : 9 June 2022, 05:52 AM. The minimum price of 10 sticks of low-tier cigarettes will be fixed at Tk 40, with a supplementary duty of 57 percent. The minimum price for 10 sticks of mid-tier ...

  13. (PDF) The Price Sensitivity of Cigarette Consumption in Bangladesh

    In Bangladesh, the average excise tax on cigarettes accounted for just 38% of the average retail price of cigarettes in 2009, and 45% in 2010. Both these rates are well below the WHO recommended ...

  14. Cigarette prices rise

    The minimum price of mid-tier cigarettes will be set at Tk 63, high-tier cigarettes a Bangladesh plans to push the price of cigarettes to reduce smoking and increase tax revenue. The minimum price for 10 sticks of low-tier cigarettes will be set at Tk 39, with a supplementary duty of 57 per cent.

  15. Estimating own-price and cross-price elasticity of cigarette

    Objectives: The overall price elasticity of cigarette consumption in Bangladesh has been studied extensively. The estimates of price elasticity by price tiers are not available in the existing literature. Methods: Using cohort data of nearly 6000 individuals from the International Tobacco Control Bangladesh survey, this study estimated the own-price and cross-price elasticity and income ...

  16. Essay on Light Cigarettes

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