In a major bid to curb inflation and provide financial relief to the public, the government is set to announce a pro-people, expansionary budget of Tk 9.38 lakh crore for the fiscal year 2026-27 on Thursday afternoon.
To fund this massive budget, the government aims to generate Tk 6.95 lakh crore in revenue. While the revenue blueprint includes expanding the tax net and raising duties on various sectors, the government has simultaneously proposed slashing or entirely withdrawing import duties, VAT, and taxes on over a hundred essential products and services.
Aimed at boosting public health, agriculture, information technology, eco-friendly transport, industrialization, and the digital economy, these tax relief measures are expected to significantly lower production costs and reduce market prices across several key sectors.
1. Food and Agriculture: Major Relief for Daily Commodities
In a decisive move to rein in skyrocketing inflation and reduce the cost of living for ordinary citizens, the government has proposed a drastic cut in source tax for 60 daily essential and basic agricultural commodities, including rice, lentils, oil, and onions.
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Daily Essentials: The source tax on 60 essential goods—which previously ranged between 1%, 2%, or 5% depending on the item—will be slashed to a uniform 0.5%.
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Dates & Spices: To ease consumers’ pockets, the existing 5% regulatory duty on the import of dates and all types of spices (including cinnamon, cardamom, cloves, and black pepper) will be completely withdrawn.
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Baby Food: Import duties on raw materials for baby food production will be reduced from 15% to 10%, lowering local manufacturing costs.
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Agriculture, Poultry, and Fisheries: * The 7.5% VAT at the trading stage for fertilizers will be exempted.
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Import duties on zinc ash (a raw material for zinc sulfate fertilizer) and poultry/dairy machinery will be reduced to 0%.
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VAT on raw materials for pesticides will be completely withdrawn, alongside a waiver on the 7.5% advance tax on imported pesticides.
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Three key raw materials for poultry, dairy, and fish feed will be brought under a 0% concessionary duty structure.
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2. Health Sector: Slashed Medical Expenses to Save Lives
To make life-saving medical procedures accessible to the masses, the proposed budget introduces heavy tax exemptions on critical healthcare equipment and pharmaceuticals:
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Kidney Dialysis: The 15% VAT and 5% advance income tax on kidney dialysis filters will be completely withdrawn, which is estimated to reduce the cost of each dialysis session by up to Tk 800. The 7.5% advance tax on blood tubing sets used in hemodialysis will also be removed.
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Cardiology and Ophthalmology: The 10% VAT on cardiac stents (heart rings) will be axed, potentially dropping the price of each stent by up to Tk 20,000. Similarly, the withdrawal of VAT on intraocular lenses used in eye surgeries will slash costs by up to Tk 5,000 per lens.
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Medicines & Raw Materials: To sustain Bangladesh’s pharmaceutical export growth and lower domestic drug prices, import duties on 51 new ingredients for Active Pharmaceutical Ingredients (API) and 17 other basic raw materials will be set to 0%. Furthermore, import duties and VAT on 9 new raw materials for anti-cancer drugs will be entirely waived.
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Mortuary Support: Import duties on mortuaries used for preserving bodies will be slashed from 25% to just 1%.
3. Tech & Digital Economy: A Push for “Smart Bangladesh”
With the goal of building a digitally advanced nation and driving employment in the IT sector, the government has announced an aggressive tax-waiver roadmap for technology hardware:
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Computers & Accessories: All import duties, regulatory duties, supplementary duties, and VAT on the import of laptops, desktop computers, servers, computer printers, and monitors will be fully waived.
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SSD and POS Machines: For Solid State Drives (SSDs), all duties and VAT will be removed except for a minor 5% import duty. For Point of Sales (POS) machines, the import duty will drop from 10% to 5%, and the advance tax will be set to 0%.
4. Green Transport: Paving the Way for EVs
To encourage eco-friendly transport, the budget introduces substantial tax cuts for electric and hybrid vehicles:
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Electric Vehicles (EVs): The total tax burden on electric cars valued up to $25,000 will fall from 93% to 64%. For EVs valued up to $50,000, the tax burden will be capped at 80%.
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Hybrid Vehicles: The total tax incident for plug-in hybrid cars up to 1800cc will be lowered from 93.16% to 73.43%.
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EV Infrastructure: The existing 39.75% total tax on EV chargers and charging stations will be completely withdrawn to make charging infrastructure more affordable.
5. Creative Media and Special Needs
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Entertainment & Culture: To support the cultural sector, the 5% regulatory duty on musical instruments (such as guitars, pianos, and violins) will be lifted. Additionally, the import duty on high-tech cinematographic cameras used in filmmaking will drop from 15% to 5%.
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Support for Persons with Disabilities: In a deeply compassionate move, the government has proposed a complete exemption of all import duties, regulatory duties, supplementary duties, and advance taxes on 21 types of specialized assistive devices that aid the independent movement of individuals with special needs.
This fiscal roadmap reflects the government’s dual approach of broadening the tax base on luxury items while aggressively insulating low-and-middle-income citizens from inflationary pressures.
