The economics of tobacco taxation in Bangladesh

The study details the present structure of tobacco taxes in Bangladesh estimates the own- and cross-price elasticities of demand for tobacco products, and simulates the impact of cigarette tax increases on government revenue and public health with the goal of recommending an effective tobacco tax policy for Bangladesh. To examine the tobacco tax structure, the team used secondary data from the National Board of Revenue (NBR) and other relevant data.

Then in order to analyze the data, the team applied the Deaton model, which exploits price variation across geographical space in the household survey data to estimate price elasticities. The research used the Household Income and Expenditure Surveys from 2010 and 2016, conducted by the Bangladesh Bureau of Statistics, to estimate price elasticities. Lastly, the team used estimates of own-price elasticity of demand in the present study and Nargis et al., 2014 to simulate various revenue and health outcomes of policy interventions.

 

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Nasiruddin Ahmed, Jahangir Hossain, Rumana Huque, Md. Tariq Hassan and Tanvir Ahmed Mozumder