The first budget of the BNP government since returning to power after almost two decades presents a striking contrast in tax policy.
While laptops and electric vehicles enjoy generous tax relief to promote a digital and green transition, a wide range of everyday essentials, construction materials and agricultural inputs face higher duties that threaten to drive up the cost of living.
Overall, the budget raises taxes on 166 products while reducing or withdrawing duties on 257 items.
Additionally, new taxes have been introduced across 15 previously untaxed sectors. Because these changes take effect immediately, retail prices could rise as soon as new imports clear customs at the revised rates.
While officials argue that the new structure aims to boost local manufacturing by making imports more expensive, consumers are likely to feel the immediate impact at the checkout counter.
Imported cashew nuts and honey now ‘luxury goods’
The import duty on shelled cashew nuts has increased from 1% to 25%, while the rate on unshelled varieties has risen from 5% to 25%, alongside a new 15% VAT.
Similarly, packaged natural honey, previously exempt from supplementary levies, is now subject to a 10% supplementary duty.
Other household and grocery items are facing similar increases. Processed sweet corn and baby corn, popular among children, will now carry a new 15% VAT.
Pet owners and seafood consumers will also feel the pinch.
A 10% supplementary duty has been imposed on dog and cat food, while the duty on catfish fillets has increased from zero to 20%.
Furthermore, while the supplementary duty on dried fish has been reduced from 20% to 10%, a new VAT of up to 15% has been introduced, meaning final retail prices are still expected to rise.
Housing costs set to face upward pressure
One of the most visible impacts is likely to be felt in the construction and housing sectors.
Duties on key inputs, including ceramic bricks, tiles, gypsum plaster, MDF boards and PVC, have increased significantly. Copper pipes, alumina and LPG-related components also face higher import charges.
Furthermore, a new VAT on household items such as mattresses, quilts and hose pipes adds extra pressure to domestic spending. Industry players warn that even modest increases in input costs could ripple through an already expensive property market.
Industrial inputs and transport hit
A wide range of industrial materials and machinery components have been targeted. Taxes on greaseproof paper, melamine base paper, rubber products, solvents, compressors and insulation materials have risen, in some cases sharply.
Transport-related imports have not been spared either. Bus tyres, engine imports above 1,200cc, bicycle parts and washing machines now face higher duties, while completely built washing machines attract a new supplementary duty.
These changes are likely to increase costs for both manufacturers and end-consumers.
Agriculture and green inputs face higher costs
Even sectors tied to agriculture and environmental sustainability have been affected. Import duties on plant cuttings, grafts and ornamental plants have been raised, potentially driving up nursery costs.
Tractor tyres now carry a new VAT, while biogas digesters face a significant duty increase, raising concerns over the affordability of alternative energy solutions in rural areas.
Tobacco products set to become more expensive
The new budget significantly increases tax pressure on tobacco products and smoking accessories. To drive up retail prices, the proposed supplementary duty on imported cigarette paper will rise from 300% to 350%.
Alternative tobacco products and manufacturing inputs face even steeper increases. The supplementary duty on nicotine granules and pouches, popular tobacco substitutes, will rise from 150% to 350%.
Furthermore, critical manufacturing components such as acetate tow and filter rods, which previously enjoyed zero-duty status, will now face a 300% supplementary duty.
Everyday accessories have not been spared either. The supplementary duty on pocket lighters is set to double from 10% to 20%, further increasing costs for smokers.
Mounting pressure on gold
Imported gold, already far beyond the reach of the average consumer due to soaring market prices, faces further fiscal pressure. The proposed duty increase on gold bars from Tk4,000 to Tk5,000 per bhori (11.664 grams) is expected to push retail jewellery prices even higher.
Meanwhile, youth lifestyle gadgets and manufacturing components are also facing notable tariff increases. Smartwatches, which previously enjoyed zero-duty status, will now face a 25% import duty that could considerably inflate retail prices.
Additionally, a new 10% regulatory duty has been proposed on low-power DC motors (up to 1,200 watts), a move that could increase the cost of imported electric motors used in various local assemblies.
