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Published : 02 Jun 2025, 04:56 PM
In the proposed national budget for the fiscal year 2025-26, the interim government has outlined a series of tax and VAT changes that may lead to lower prices for certain goods and services.
Finance Advisor Salehuddin Ahmed presented the proposed budget for the 2025-26 fiscal year in a speech broadcast by state-run BTV on Monday.
The changes include both exemptions and duty adjustments.
Here are some of the main areas where costs are likely to drop:
BANK DEPOSITS
The proposed budget removes excise duty on bank deposits up to Tk 300,000, offering relief to low and middle-income account holders.
Currently, if a bank account balance reaches Tk 100,000 at any point in a year, the account holder must pay excise duty, which is deducted once annually by the bank.
EVERYDAY ESSENTIALS TO GET CHEAPER
A broad range of consumer and essential products will benefit from VAT exemptions. These include all types of utensils made from natural materials such as leaves, flowers, and bark, handmade clay utensils, and textile-grade date chips, all of which would enjoy VAT exemptions at the production stage.
Additionally, locally sold sanitary napkins, packaged liquid milk, and ballpoint pens are also set to be exempted from VAT at the business-to-business level.
The supplementary duty on all types of ice cream has been halved, from 10 percent to 5 percent.
RELIEF FOR ENERGY CONSUMERS
In the energy sector, the interim government has proposed a VAT exemption on the import of liquefied natural gas (LNG), which may positively impact gas prices and energy costs.
DIGITAL ACCESS EXPANDED
Tech-related products are also included in the plan, with VAT exemptions extended to computer monitors up to 30 inches, an increase from the previous 22-inch limit.
ENCOURAGING GREEN MOBILITY
For greener transport and energy solutions, the existing VAT exemptions on locally produced motor vehicles will continue.
Along with that, hybrid and electric vehicles, including general and ICU ambulances, will be conditionally exempted from VAT until Jun 30, 2030.
The interim government also plans to fully exempt VAT on the production of lithium and graphene batteries until Jun 30, 2027. From Jul 1, 2028 to Jun 30, 2030, these batteries will be granted exemption from all VAT in excess of 5 percent.
The budget also proposes lowering the duty and tax rates on buses with 16 to 40 seats, and microbuses with 10 to 15 seats.
Similarly, VAT has been waived on lease rent for passenger aircrafts.
HEALTHCARE GETS A BOOST
The budget also seeks to support the health sector by making healthcare equipment more accessible. Until 2030, all VAT will be exempted on the import and local purchase of necessary materials and spare parts used to manufacture hospital beds.
COST CUTS FOR COLD STORAGE, PHARMA
The import of essential components for refrigerators, freezers, air conditioners, and their compressors will remain exempt from supplementary duty until 2028.
In a move aimed at keeping petroleum prices stable, the interim government has proposed to reduce duty and tax rates on both crude and refined petroleum imports, and remove the tariff value.
The budget also proposes reducing the import duty on refined sugar.
It aims to extend duty and tax exemptions on the import of raw materials used in the pharmaceutical industry, including those for producing cancer-preventing drugs, and active pharmaceutical ingredients (APIs).
SUPPORT FOR LOCAL MANUFACTURING
A new notification has been proposed to allow concessional duty benefits on the import of machinery required to establish cold storage facilities.
To promote local manufacturing of agricultural machinery, the budget proposes reducing existing duties on auto parts used in the production of combined harvesters.
Duty reductions have been proposed on raw materials used in tyre production.
FROZEN MEAT
Import duties on different types of meat and edible ingredients have been reduced from 20 percent to 10 percent. The list includes frozen meat of cows, buffalo, goat and sheep.
SALTWATER FISH
Saltwater fish also saw a cut on import duties, down to 10 percent from 20 percent, including different types of salmon and tuna, fish heads and tails, and canned fish or fish powder.
PASTA, BEVERAGES
Import duty on pasta and other cereal-based food items has been cut from 30 percent to 20 percent.
Non-alcoholic beverages, flavoured or sweetened drinks, and mineral water will now face a reduced duty of 100 percent, down from the previous 150 percent.
FUEL PRODUCTS
A significant reduction in fuel tariffs has been proposed, ranging from 20 percent to a full 100 percent.
PLASTIC GOODS
Import duty on plastic products including boxes, tables, kitchenware, polymer bags and sacks, as well as plastic doors, windows, frames, thresholds, spools, caps and bobbins has been reduced from 45 percent to 40 percent.
IMPORTED CLOTHING, FOOTWEAR
Tariff on a variety of imported garments and shoes for both men and women has been reduced from 45 percent to 40 percent.
Items include men’s shirts, jackets, blazers, trousers, overalls, bibs, breeches, synthetic shorts and underwear.
Also affected are jerseys, pullovers, waistcoats, cardigans, stockings, socks and hosiery.
Women’s innerwear, including vests, briefs, panties, bras, negligees, bathrobes, dressing gowns, shawls, scarves, mufflers, mantillas and veils will also benefit from the revised duty.
Footwear made of rubber, plastic, leather or textile will now be taxed at 40 percent, down from 45 percent.
ZERO-DUTY
SOFTWARE, DIGITAL TOOLS
Import duty on key digital products has also been reduced from 25 percent to 15 percent.
The list includes:
With the post-July Uprising realities, the budget is being delivered outside parliament in a new format.
It is set for approval on Jun 30, taking effect from Jul 1.
