The proposed national budget for the fiscal year 2025–26 will be presented in the National Parliament today, Sunday (June 2). Financial advisor Salehuddin Ahmed will announce the budget at 3:00 PM, which will be broadcast live on Bangladesh Betar and Bangladesh Television.
The proposed budget is expected to focus not only on increasing revenue collection but also on protecting consumer interests. As a result, there may be proposals to increase or decrease duties and VAT on various products, which could lead to price hikes for some items and reductions for others.
VAT Withdrawal on LNG Imports
The proposed 2025–26 budget includes a proposal to withdraw the 15% VAT on imported LNG. Currently, importers pay 15% VAT and 2% advance tax at the import stage. Additionally, there’s a 15% VAT and 2% source tax at the sale stage. Gas distribution companies also face a 5% withholding tax when paying margin bills.
Reduction in Fuel Duties
The budget may reduce the duty on crude fuel oil from 5% to a lower rate, and on other fuel imports from 10% to 3%. This could lead to slight reductions in fuel prices. There may also be duty exemptions on the import of raw materials and machinery for local industries such as tires, tubes, brake pads, and marble-granite.
Duty Cuts for Leather Industry
Considering the potential of the leather industry and the Eid-ul-Azha season, the budget may propose reducing duties on certain chemicals used in leather processing from 5% to 1%. This will lower processing costs in the sector.
Lower Source Tax on Essential Goods
The budget proposes reducing the source tax on the import of essential goods. Currently set at 1%, it may be halved. This could reduce the prices of rice, wheat, lentils, edible oil, sugar, salt, and other essentials. The government believes that while source tax doesn’t contribute significantly to revenue, traders often use it as an excuse to raise prices. The tax cut aims to provide relief to consumers.
Reduced Tax on Land Registration
A new system for land registration fees and taxes based on "percent" instead of "katha" (a local land measure) is being proposed. Although advance tax may be slightly reduced, the National Board of Revenue (NBR) expects the overall tax amount to remain roughly the same. Last fiscal year, this sector generated about Tk 6,500 crore in revenue.
Lower Duties on Sugar Imports
To stabilize sugar prices, the budget may propose reducing the import duty on refined sugar from Tk 4,500 per ton to Tk 4,000 per ton. The government has already taken several steps to cut duties and taxes in this sector.
Duty Cuts on Raw Materials for Soybean and Paper Industries
To support local industries and production, the proposed budget includes duty exemptions on soybean meal, the paper industry, and neutralized soybean oil. Duties on phenolic resin and sandpaper used in construction and paper industries may be reduced from 10% to 5%, which would lower production costs.
Cheaper Newsprint for Newspapers
Organizations like NOAB (Newspaper Owners’ Association of Bangladesh) have proposed a reduction in customs duty on newsprint. The budget may respond by reducing this duty from 5% to 3% to support the local media industry.
Cricket Bats to Be Cheaper
To promote domestic bat production and exports, the duty on imported wood used to make cricket bats may be reduced from 37% to 26%. This could make cricket bats more affordable and widely available.
Extra Incentives for Domestic Software Development
To encourage the IT sector and software exports, the budget may propose reducing import duties on foreign operating systems, databases, development tools, and security software from 10% to 5%. This would lower costs for freelancers and local IT firms.
VAT Exemption on Clay and Leaf-Based Utensils
The budget proposes to eliminate the current 15% VAT on clay and leaf-based household items, bringing down prices on these traditional products.
Lower Duties on Foreign Juices
Supplementary duty on the import of non-alcoholic juices may be reduced from 150% to 100%. This could make foreign juices more affordable.
Duty Cuts on PVC Pipes and Copper Wire
For infrastructure development, the budget may propose reducing import duty on materials used for PVC pipes from 25% to 15%, and on copper wire materials from 15% to 5%. Additionally, there are proposals for duty exemptions on raw materials and machinery for tires, tubes, brake shoes, marble, and granite, which may lower their market prices.
