The upcoming budget proposal in Bangladesh aims to significantly reduce the withholding tax (WHT) on a wide range of essential agricultural and consumer goods, a move expected to ease inflationary pressure and strengthen supply chains across the country.
According to the proposal, the existing withholding tax rates of 5 per cent, 2 per cent, and 1 per cent on key commodities will be reduced to a uniform 0.5 per cent. If implemented, the measure will apply to nearly 60 essential items, including rice, wheat, potatoes, onions, garlic, ginger, salt, sugar, edible oil, and seeds.
The proposed list also covers livestock, poultry, fish, shrimp, meat, pulses, flour, semolina, spices such as turmeric, chili, cardamom, cinnamon, clove, and bay leaves, as well as eggs, vegetables, fruits, and liquid milk. Inputs for agriculture and food production—such as poultry feed, fish feed, de-oiled rice bran, cotton, raw hides, organic fertilizers, and organic pesticides—are also included.
In addition, key agricultural raw materials like jute, jute sticks, mustard, sesame, green tea leaves, rubber-head products, and other agro-based commodities are covered under the tax reduction plan.
Under the proposal, in cases involving procurement through open or contractual tenders and related financing agreements, banks and financial institutions will deduct withholding tax at a reduced rate of 0.5 per cent on the amount paid or recognised.
Policy makers believe this tax rationalisation will help reduce market distortions, lower consumer prices, and improve the efficiency of supply chains. By reducing the tax burden across essential goods, the government aims to help stabilise food prices and ease overall inflationary pressure in the economy.
