Finance Minister Amir Khasru Mahmud Chowdhury unveiled the proposed national budget for the 2026–27 fiscal year in parliament on Thursday. The budget, the first under the current government, stands at Tk938,000 crore.
The proposed budget introduces a mixed tax strategy—reducing duties on essential goods while increasing taxes on luxury, import-dependent, and selected industrial products.
Price cuts likely
The government has proposed tax reductions on around 60 essential commodities, including rice, wheat, potatoes, fish, onions, garlic, sugar, edible oil and other daily necessities. The withholding tax rate on these items has been reduced from 5%, 2% and 1% to 0.5%, which may ease pressure on household budgets.
Import duty on baby food raw materials has been cut from 15% to 10%, while a 5% regulatory duty on key spices such as cumin, cardamom, cinnamon, cloves, black pepper and coriander has been fully withdrawn. Import duty on dates has also been removed.
For technology products, all import duties, VAT and supplementary duties on laptops, desktops, servers, printers and monitors have been withdrawn, potentially lowering prices.
Tax relief has also been introduced for solar equipment, selected medicines including cancer drug inputs, dialysis filters, musical instruments, and several cosmetics and household items.
Electric vehicles and plug-in hybrid vehicles have received significant tax reductions, creating scope for lower prices.
Price increases likely
At the same time, the budget increases taxes on several goods, raising concerns over price hikes.
Cigarette prices have been raised across all tiers, with the minimum retail price of a 10-stick pack fixed at Tk62, while premium packs are priced at Tk210.
A 350% supplementary duty has also been proposed on nicotine products, including pouches and granules.
Import duties on fuel-powered vehicles (1,200cc–1,600cc engines) have been raised to around 156%, which may increase prices of mid-range cars.
Higher duties have also been imposed on imported cashews (up to 25%), while assessable values of honey and betel nuts have been increased.
Taxes on imported processed foods, coffee, LPG cylinders, cosmetics, tiles, sanitary ware, bicycles, toys and microwave ovens have also been raised.
In the construction sector, increased VAT on rod production inputs is expected to raise steel prices, which may push up housing and infrastructure costs.
