The prices of tobacco products – cigarette and other smokeless products—have gone slightly up in the proposed national budget for 2025-2026 fiscal year due to new customs duties on tobacco seeds and higher supplementary duties on certain raw materials used in tobacco product manufacturing.
The proposal was placed by Finance Adviser Salehuddin Ahmed during the budget presentation on Monday.
“Tobacco products like cigarettes and smokeless tobacco such as jorda and gul pose serious risks to public health. Although high duties are already in place on their imports, the current 0% customs duty on tobacco seed imports is inconsistent with public health goals,” said the adviser.
He proposed creating a new HS Code for tobacco seeds to replace the existing classification, allowing a 25% customs duty to be imposed in order to discourage tobacco cultivation.
Besides, the government-formed investigation committee has submitted a report on tax evasion related to tobacco products.
The report recommends discouraging commercial imports of raw materials used in cigarette production.
Based on the report, it has been proposed that the existing tax and duty rates on raw materials used in cigarette production be tripled for manufacturers.
As per the recommendations, a 100% supplementary duty will be imposed on the import of paper used in cigarette production by manufacturing companies.
For commercial importers, the supplementary duty on such paper could go as high as 350%.
Currently, no supplementary duty is applied on the import of acetate tow and acetate filter rods used in cigarette manufacturing by producers.
However, the government is reviewing the possibility of changes in this area as well.
Sourse: UNB
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