How does our economy suffer when non-imported cigarettes dominate the market? How to get rid of this?

Despite the large taxes put on international cigarettes, smuggling remains a serious economic and regulatory concern in Bangladesh. The presence of brands such as Oris, Esse, Mond, and Dunhill in local markets without valid import documentation or tax stamps indicates significant illegal trafficking. This predicament has far-reaching economic ramifications.

Firstly, the economic impact is profound due to the substantial loss in potential revenue. With duties and taxes on legally imported cigarettes amounting to over 600%, the smuggling of these products bypasses a critical revenue stream for the government. As highlighted, the illicit cigarette market accounted for an estimated revenue loss of Tk800 crore in FY23 alone. This loss not only undermines the financial resources available for public goods and services but also distorts market dynamics, putting legitimate businesses at a competitive disadvantage.

Furthermore, cigarette smuggling undermines public health measures. Legally imported cigarettes must have health warnings in Bangla as part of a larger attempt to educate people about the dangers of smoking. Smuggled cigarettes, which lack these warnings, have the potential to harm public health efforts, particularly among less educated portions of the community who rely on them for information. The presence of a complex network comprising importers, customs officials, and other intermediaries suggests widespread corruption and inefficiency in the regulatory environment. This not only enables the admission of illegal cigarettes, but it also undermines public trust in government institutions. The failure to successfully prosecute and punish those participating in these criminal acts exacerbates the trust deficit.

Another important component is to improve interagency cooperation. The creation of specific task teams comprised of customs, law enforcement, and intelligence agencies can help coordinate attempts to destroy smuggling networks. The recent creation of a committee chaired by the CIID Director General is a positive step forward, but it must be sustained and expanded. Public awareness efforts can also help reduce the demand for contraband cigarettes. Educating customers on the legal implications and health dangers involved with illicit cigarettes can help reduce demand. Furthermore, encouraging people to buy cigarettes through official means can help reduce the market for smuggled products over time.

Another important component is to improve interagency cooperation. The creation of specific task teams comprised of customs, law enforcement, and intelligence agencies can help coordinate attempts to destroy smuggling networks. The recent creation of a committee chaired by the CIID Director General is a positive step forward, but it must be sustained and expanded. Public awareness efforts can also help reduce the demand for contraband cigarettes. Educating customers on the legal implications and health dangers involved with illicit cigarettes can help reduce demand. Furthermore, encouraging people to buy cigarettes through official means can help reduce the market for smuggled products over time.

To preserve its commercial interests and public health objectives, Bangladesh requires a strong legislative framework with severe consequences for cigarette smuggling. This comprehensive approach incorporates technical advancements, increased regulatory capability, interagency collaboration, public awareness, and a robust legal framework.