The VAT rate on air conditioners, refrigerators, and other cooling appliances may be reduced from 15% to 7.5% in the 2026-27 budget. This reduction is expected to lower the prices of these products for consumers. The decision aims to support local manufacturers and reduce imports. Sources from the finance ministry confirmed this information.
NBR officials stated that the high VAT rate at the production stage had led to an increase in imports of these appliances. Reducing the VAT rate is intended to decrease imports and support local manufacturers. An NBR official, speaking on condition of anonymity, mentioned that the high VAT rate had also reduced business for various local manufacturers.
Industry stakeholders believe that the VAT reduction will have a positive impact on the sector and lower product prices. Pran-RFL Group's Marketing Director, Kamruzzaman Kamal, noted that the demand for these appliances is increasing, and the VAT reduction will benefit local industries and consumers. He added that the VAT reduction will directly translate to lower prices for consumers.
The VAT reduction is seen as a positive decision by manufacturers, especially given the current challenging economic conditions. Selim Ullah Selim, Director (Marketing) of Jamuna Electronics, highlighted the increased raw material costs and operational expenses, stating that the VAT reduction will provide some relief. However, manufacturers had demanded a complete withdrawal of VAT.
