The proposed extension of duty and value added tax (VAT) exemptions on pharmaceutical industry’s raw material imports will help strengthen the sector, said The Bangladesh Association of Pharmaceutical Industries (BAPI).
“The exemption on raw materials for Active Pharmaceutical Ingredients (API) is expected to significantly bolster the domestic API industry, which currently relies on imports for 90% of the national demand,” the association said in a post budget reaction statement.
This move will reduce import dependency, enhance local API production, and improve the availability and affordability of high-cost cancer medications.
BAPI, however, expressed its concerns over increased duties on sandwich panels and laboratory furniture, critical for pharmaceutical industry infrastructure.
Previously taxed at just 1%, the current higher rates pose challenges for new projects. The association urged authorities to reinstate the lower duty to support sector growth.
Finance Advisor Mr. Salehuddin Ahmed, in his budget speech, reiterated the government’s commitment to universal healthcare by 2030, emphasizing infrastructure development, workforce recruitment, and duty reductions on medical equipment for hospitals with 50+ beds. BAPI praised these measures, noting their potential to enhance patient care and medical services nationwide.
Additionally, the budget proposes conditional VAT exemptions for general and ICU ambulances (including hybrid/electric vehicles) until 2030—a move BAPI believes will significantly improve emergency healthcare services.
While lauding the government’s initiatives, BAPI stressed the importance of effective implementation by the National Board of Revenue (NBR) and other agencies.
The association also called for the several revisions in the final budget. For instance, it urged maintaining the previous corporate tax rate for non-listed companies that surged to 27.5% from 25% for the cashless firms.
It also urged raising the tax-free income threshold.
Besides, BAPI urged reconsideration of the proposal to raise the minimum corporate income tax to 1% of the turnover from 0.6% as it risks harming struggling companies.