Online Desk  :   In the proposed national budget for the fiscal year 2025–26, amounting to Tk 7.90 trillion (7 lakh 90 thousand crore), the government has set a revenue collection target of Tk 4.99 trillion (4 lakh 99 thousand crore). To meet this target and protect domestic industries, the government plans to impose or increase duties, VAT, and other taxes on a range of products, which could lead to price hikes in the market.

Key products that may become more expensive VAT increase on rods and steel : Rod is one of the key components in the construction industry. In the proposed budget, the government plans to increase Advance Income Tax (AIT) and Value Added Tax (VAT) to enhance revenue collection. Currently, the total duty and VAT at the import and production levels exceed 40 percent. The proposed budget includes a plan to increase VAT by 20–23 percent on imports and 20 percent on local production. However, the existing fixed import duty may be removed. If duties are increased, rod prices may rise by approximately Tk1,400 per ton for consumers. For reference, a fixed duty of Tk1,500 per ton is currently imposed on imported steel scrap—the raw material for steel. Additionally, a fixed VAT of Tk2,200 per ton is charged on billet and rod production. Altogether, the government currently collects Tk3,700 per ton in duties and VAT.

VAT increase on ACs and refrigerators : Just six months ago, the corporate tax for manufacturers of refrigerators and air conditioners was doubled. Now, the government is planning to increase the VAT on these products. Currently, a 7.5 percent VAT is imposed at the production level for fridges and ACs. The National Board of Revenue (NBR) is considering raising this to 15 percent in the 2025–26 fiscal year, which may worry domestic producers.

Motorcycle and bicycle parts : In the 2024–2025 budget, all additional import, regulatory, and supplementary duties on motorcycle engine parts were withdrawn. However, this did not significantly lower motorcycle prices. In the upcoming fiscal year, the government may reintroduce some duties and VAT. Since 2018, over ten motorcycle factories have been established in Bangladesh, including brands like Honda, Yamaha, Suzuki (Japan), and Uttara Motors, TVS, Hero (India). Local brand Runner Automobiles is also in operation.

Cigarettes : In January, both prices and duties on cigarettes across four tiers were increased, with a 5–7 percent hike in supplementary duty on 10-stick packs in the lower, middle, and upper tiers. Thus, no new changes are expected in the upcoming budget. However, a proposal to increase the supplementary duty on cigarette paper used in the tobacco industry from 60 percent to 100 percent is likely, which may impact prices again.

Locally manufactured mobile phones : The reduced VAT rate on mobile phone manufacturing and assembly is set to increase. The proposed budget suggests raising VAT by 2 to 2.5 percentage points depending on the category, which may lead to higher prices for locally made mobile phones.

Higher duty on batteries for battery-powered rickshaws : Battery-powered rickshaws, considered hazardous and largely unregulated across the country, may become more expensive. The customs duty on their 1,200-watt DC motors is proposed to be increased from 1 percent to 15 percent.

Increased cost for cosmetics : The minimum import value of various cosmetics used by women—such as lipstick, lipliner, eyeliner, face wash, and makeup items—is being increased. For example, the minimum customs value for imported lipstick is currently $20 per kg, which may be raised to $40. Similar hikes are expected across other cosmetics categories.

VAT doubled on single-use plastic products : A proposal has been made to double VAT on single-use plastic items such as tea and coffee cups, plastic plates, and bowls—raising VAT to 15 percent. As a result, these products may become more expensive. However, eco-friendly and natural substitutes for these items will remain VAT-free to encourage environmental protection.

Blades : The price of shaving blades used in salons may increase. The VAT on blades made from stainless or carbon steel strips is proposed to rise from 5 percent to 7 percent.

Tableware and household plastic items : VAT on plastic tableware, kitchenware, hygienic, and toilet items used at home will be raised from 7.5 percent to 15 percent, likely increasing prices.

Locally produced yarn : VAT on yarn produced in local textile mills is going up. The specific tax per kilogram of cotton and man-made fiber yarn is proposed to rise from Tk3 to Tk5. This may increase the cost of products made from local yarns, such as gamchas (towels), lungis, and garments.

Helicopters : The new budget proposes a 10 percent import duty on helicopters, which were previously duty-free. This will increase the cost of importing helicopters.

Imported Chocolate : The budget proposes to raise the minimum customs value on chocolate imports from $4 to $10 per unit, which may result in higher prices for imported chocolates.

Imported toys : To protect local industries, the tariff value of imported toys is being increased in the proposed budget, which could make imported toys more expensive.

Marble and granite : The supplementary duty on marble and granite stones used in flooring is set to increase from 20 percent to 45 percent, raising their prices.

Other items likely to see price hikes due to increased duties/taxes:

• Barbed wire
• All types of screws, nuts, and bolts
• Electric line hardware
• Pole fittings
• Tobacco seeds
• Door locks