BACKGROUND: This abstract epitomizes the impediments that the interference of the tobacco industry into taxation systems presents, with emphasis on the economic impact of export duty exemptions on tobacco leaf. It flags how the industry manipulates, evades taxes, and exploits policy loopholes to maximize profits at the expense of public health and government revenue. The exemption of export duties on tobacco leaf since 2017 has caused massive revenue loss and undermines Bangladesh's commitment under the FCTC to protect and promote public health.
METHODS: The study is based on secondary data sourced from National Board of Revenue (NBR) and Export Promotion Bureau (EPB) and reports published by different organizations. The study reflects on tax compliance trends, revenue, and the tobacco industry's practices with regard to public health. It further explores the legal frameworks with regard to the patterns of tax evasion, industry interference and economic impacts due to the changes in export policy.
RESULTS: Tobacco companies like British American Tobacco Bangladesh evade taxes by forcing MRP violations and hoarding products. Whatever the company may exaggerate in contribution to national revenue, it paid only 1489 crore BDT in customs duty and income tax combined in the year 2024, while deceptive campaigns fueled fear of smuggling to block tax hikes. Tobacco leaf export duty exemptions since 2017 have cost Bangladesh around 50,000 crore BDT in revenue.
CONCLUSIONS: Revisiting the export duty exemption will be key to recovering revenue and incentivizing crop diversification that can help reduce the cultivation of tobacco crops. Better functioning of pricing and taxation, introducing digital tax systems, and countering misinformation campaigns can also improve compliance. Along with this, strong compliance with FCTC guidelines will improve fiscal sustainability and public health, thereby aligning economic priorities with health and long-term development goals.