Finance Minister Amir Khosru Mahmud Chowdhury presented the budget proposal for the fiscal year 2026-27 in the Jatiya Sangsad on Thursday afternoon. This is the first budget of the BNP government in this term. The budget proposes tariff reductions on various goods and services, which may lead to price reductions. Conversely, tariff increases on certain goods and services may result in higher prices. The tariff proposals become effective immediately upon announcement.
The budget proposal includes tariff reductions on a larger number of goods. For instance, the minimum retail price of cigarettes has been proposed to increase, which will raise their prices. Additionally, a 350% supplementary duty has been proposed on nicotine granules and nicotine pouches, deemed highly harmful to public health.
To reduce the use of diesel, octane, or petrol-powered vehicles, which are harmful to the environment, the duty on imported cars with internal combustion engines between 1,200 and 1,600 cc has been proposed to increase from 132.36% to approximately 156%. This will increase the prices of such vehicles.
To encourage domestic cultivation and production, the import duty on unprocessed and processed cashews has been increased from 1% and 5% to 25%, respectively. However, the import duty on unprocessed cashews for domestic producers has been set at 15%. Overall, the prices of imported cashews will increase.
To protect the domestic fish processing industry, a 20% supplementary duty has been imposed on imported Pangasius fish fillets. The import of composite LPG (liquefied petroleum gas) cylinders will now be subject to value-added tax (VAT) at the import stage, which may increase their prices.
The minimum valuation price for importing natural honey has been increased from $2 to $7 per unit, which will increase the duty payable, potentially raising prices. Similarly, the minimum valuation price for importing betel nuts has been increased by $0.25 per unit.
The valuation prices for importing confectionery, coffee, prepared foods, lip liners, lip gels, and similar products have been increased, which will increase the duty payable. The VAT on various rod-making materials has been increased, which may raise the prices of rods.
Due to increases in tariffs and valuation prices, the prices of imported tiles, sanitary ware, basins, foam, microwave ovens, bicycles and parts, toys, and other items may increase.
The Finance Minister has proposed reducing the VAT rate on 60 essential commodities, including rice, wheat, potatoes, livestock, poultry, fish, onions, garlic, ginger, salt, sugar, edible oils, and seeds, from 5%, 2%, and 1% to 0.5%. He stated that this measure, in line with the democratic government's election promise, will bring relief to public life amidst the uncontrolled rise in commodity prices in recent years.
The import duty on materials for preparing infant food has been reduced from 15% to 10% (as industrial raw materials). The Finance Minister said this will reduce the prices of infant food in the market.
Regulatory duties on spices such as cumin, cinnamon, cardamom, cloves, black pepper, and coriander have been completely withdrawn. The 5% regulatory duty on date imports has also been withdrawn, which may reduce prices.
The VAT rate on gold supply has been reduced from 5% to 0.5%. Previously, the VAT on Tk 2.5 lakh worth of gold was Tk 12,500. Now it has been reduced to Tk 2,500 per tola.
Various incentives have been provided for electric vehicles (EVs), which will reduce their prices. Additionally, significant exemptions have been granted for batteries and other equipment used in EV charging stations. For example, the duty on EVs has been reduced from 93% to 64% for vehicles up to $25,000 and 80% for vehicles up to $50,000.
Exemptions have been provided for new plug-in hybrid electric vehicles. The advance income tax for registering and renewing electric vehicles with the Bangladesh Road Transport Authority (BRTA) has been reduced.
All import duties, regulatory duties, supplementary duties, and VAT on importing laptops, desktop computers, servers, computer printers, and computer monitors have been withdrawn.
The 15% VAT and 5% advance income tax on importing dialysis filters have been withdrawn. The Finance Minister said this will reduce the cost of each dialysis service for kidney patients by about Tk 800.
Various exemptions have been provided for importing raw materials for medicines. Additionally, the Finance Minister has provided exemptions for importing nine new raw materials for manufacturing cancer drugs.
The existing 5% regulatory duty on importing musical instruments such as guitars, pianos, and violins, and their parts, has been completely withdrawn.
The existing 15% import duty on importing cinematographic cameras and their parts has been reduced to 5%.
Due to tariff reductions and changes in valuation prices, the prices of imported meat, animal feed, point-of-sale (POS) devices, solar equipment, lipstick, face wash, and various cosmetics may decrease.
