Finance Minister AHM Mustafa Kamal has proposed changes to duties on different products, which will result in a decrease in their prices.
In the proposed budget, the prices of these products are expected to change:
Agricultural machinery: Local production of agricultural machinery and equipment may decrease at the local level due to the exemption of tariffs and the cost of manufacturing agricultural machinery.
LED bulbs: The prices of domestic LED bulbs and Swiss sockets may also decrease. Import duties and supplementary duties currently account for 20-25% of the cost, which is proposed to be reduced by 10-5% in the upcoming budget. This reduction in tariffs can lead to a comparative decrease in the prices of domestic LED bulbs and Swiss sockets.
Meat and meat-based products: The upcoming budget may propose categorizing meat and meat products as essential commodities. The aim is to reduce the prices of these products, which have been rising beyond the reach of low and middle-income consumers. The advance income tax on these products may be reduced from 7% to 2%. Lowering the advance income tax can potentially result in a decrease in the price of meat.
Sweet: Sweet are now included in the list of reduced prices. The VAT on sweetmeats has been lowered from 15% to 7%. Additionally, VAT reductions are also being applied to certain other national packaged goods.
Imported clothes: In the upcoming budget, there may be a reduction or exemption of duties on imported foreign clothing. According to NBR sources, the tax rate on these products could be reduced by 20-25% to 5-10%. As a result, if the tax on luxury clothing is reduced, these garments can be obtained at a lower price.
E-commerce expenses: Currently, e-commerce businesses are required to pay a 5% tax rate on their sales (MUSAK), a 15% VAT rate on delivery charges, and a 5% VAT rate on house rent. By considering the demands of e-commerce businesses, it is possible that a 5% VAT exemption can be granted on sales. This would result in a decrease in delivery charges if e-commerce platforms receive VAT exemptions.
Medical Supplies: The government may consider exempting duties on the import of raw materials for the production of medicines and medical supplies in the budget. The import of raw materials for anti-cancer and anti-diabetic medicines could be included in the scope of duty exemption.
Sanitary Napkins: Similarly, sanitary napkins, diapers, and toilet tissues could see an extension of the VAT exemption period to one year as essential items for public health and hygiene. According to sources, the government may extend the VAT exemption on sanitary pads and diapers until 30th June 2024, with the aim of boosting local production and supporting further development in the relevant industry.
Soap and Shampoo: The current 5% VAT relief on raw materials for soap and shampoo production, specifically lab-sourced and SLES (Sodium Laureth Sulfate), may also be extended for another year.
