The biggest surprise in the proposed budget for the upcoming fiscal year is its strong focus on solar power equipment and electric vehicles (EVs), both of which are set to receive significant tax exemptions.
Alongside these green sectors, the prices of several daily necessities are also expected to fall.
Presented by the finance minister on Thursday, the proposed budget introduces various changes to import, supplementary and regulatory duties, as well as VAT rates.
However, because these reductions will only take effect after the budget is passed and the relevant statutory regulatory orders (SROs) are issued, it will take some time for the tax cuts to be reflected in consumer prices.
EV users have reason to celebrate
The import duty on electric vehicles priced at up to $25,000 is proposed to fall from 93% to 64%, while the duty on vehicles priced at up to $50,000 will fall to 80%.
To spur domestic EV manufacturing, the budget proposes waiving all customs duties and taxes for local companies with high value addition, leaving only a 3% import duty on parts and components.
For manufacturers with lower value addition, a 15% import duty will remain, though they will still be exempt from other customs duties and taxes.
Furthermore, duties on electric chargers and charging stations, previously subject to a 10% duty, 15% VAT, 7.5% advance tax and 5% Advance Income Tax (AIT), have been reduced to zero. Similarly, the 10% duty, 7.5% advance tax and 5% AIT on electric bus and truck chassis, including batteries and motors, have been completely withdrawn.
The supplementary duty on battery-powered three-wheelers has also been halved from 20% to 10%.
Technology product prices set to fall
Thanks to extensive duty exemptions in the proposed budget, the prices of various technology products are expected to decline.
Laptops and portable computers weighing up to 10kg will become more affordable, as their 10% import duty and 5% Advance Income Tax (AIT) have been reduced to a combined 2%. Computer printers will also see significant relief, with the 5% duty and 15% VAT withdrawn entirely, while the AIT has been lowered from 5% to 2%.
Other components and peripherals have also received major tax cuts. The 25% duty on monitors of up to 30 inches has been reduced to zero, alongside the 5% duty on central processing units (CPUs) and input/output units. For flash memory cards, the duty has been cut from 15% to 5%, while the 15% VAT has been eliminated entirely.
Businesses will benefit from lower prices for transaction hardware, as the duty on Point of Sale (POS) machines has been halved from 10% to 5%, and the 7.5% advance tax has been removed.
The mobile sector is also getting a significant boost. The proposal includes the complete withdrawal of the Tk300 tax on mobile SIM cards. To support domestic manufacturing, the advance tax on 22 types of raw materials used by the local mobile phone industry is proposed to be reduced to 5%.
Solar power equipment to be cheaper
For equipment used in setting up solar power plants, almost all customs and tax exemptions have been retained, except for VAT and Advance Income Tax. Currently, the sector faces a combined customs duty and VAT burden of more than 51 per cent. Consequently, prices of these products are expected to decrease significantly.
These customs and tax exemptions also pave the way for reducing the prices of assistive devices for people with special needs.
The minimum assessed value for products such as lipstick, face cream, face wash, moisturising lotion, door locks and cookers and ovens has been reduced. As a result, the basis for assessing import duties on these items will decline.
Duties slashed on imported meats, seafood and spices
Import duties on frozen meat and offal (beef and chicken), along with commercially imported live ducks, chickens and turkeys, have been reduced from 25% to 15%. Furthermore, the 10% supplementary duty on frozen beef, offal and uncut poultry meat has been eliminated entirely. These sweeping rollbacks are expected to drive down retail prices for consumers.
The budget also offers relief on premium proteins and seafood. The import duty on ostrich, emu, marine fish, oysters, scallops, mussels, cuttlefish and clams has been lowered from 25% to 15%, alongside the complete withdrawal of the regulatory duty.
For essential commodities and pantry staples, the 3% regulatory duty on fresh or dried dates, as well as powdered and whole spices, has been removed entirely, signalling potential price reductions at the grocery counter.
The government has also restructured taxes on rice bran oil to stabilise the local market. The import regulatory duty on the cooking oil has been halved from 20% to 10% to encourage supply. Conversely, a new 25% export duty has been imposed to safeguard sufficient supplies for domestic consumers.
A breath of relief in the health sector
The healthcare sector has received long-awaited relief, with the proposed budget introducing sweeping tax reductions on critical, life-saving medical equipment and treatments.
Kidney patients stand to benefit significantly from a major reduction in treatment costs. The budget proposes the complete withdrawal of the 15% VAT and 5% Advance Income Tax (AIT) on imported dialysis filters and leukocyte filters. Furthermore, the 7.5% advance tax at the import stage for haemodialysis blood tubing sets has been eliminated entirely.
The budget also implements substantial duty rollbacks for specialised medical infrastructure. Duties on morgue refrigerators and gas-tight biological safety cabinets have been slashed from 25% to just 1%.
In addition, a proposal to exempt the 10% VAT at the supplier stage on imported heart stents and intraocular lenses is expected to directly lower patient expenses, reducing the price of cardiac stents by approximately Tk20,000 and each intraocular lens by about Tk5,000.
To support oncology patients, the import duty on nine new types of raw materials used in the manufacturing of cancer drugs will be reduced to zero. This domestic production incentive is expected to lower the retail prices of essential cancer medicines.
Duty exemptions in the industrial sector
The proposed budget introduces significant tariff rollbacks designed to lower operational costs across various industries, manufacturing sectors and commercial services.
In the printing and media industries, the import duty on photographic paper, textile rolls and cinematograph film has been slashed from 25% to 5%, while the duty on composite paper has been cut from 10% to 5%. Industrial infrastructure and logistics have also received a boost, with the duty on sewage treatment plants (STPs) lowered from 5% to 1%, and the tariff on tugs and pusher craft halved from 10% to 5%.
Commercial consumer goods will also see notable relief. Duties on toys and statues are proposed to fall from 25% to 10%, while the supplementary duty on sound recording equipment has been eliminated entirely.
Furthermore, the government has withdrawn regulatory duties from more than 20 product categories, including drones, yachts, musical instruments, works of art, coffins and carbon electrodes.
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