Finance Minister Amir Khasru Mahmud Chowdhury on Thursday unveiled tax, VAT and duty relief measures in the Tk 9,38,000 crore budget for fiscal year 2026–27, targeting essentials, healthcare, electric vehicles and high-tech imports to ease inflationary pressure and support investment.
Presenting the budget in Parliament, he said the measures aim to reduce the burden on households affected by years of high prices while encouraging private investment and job creation.
The government proposed cutting withholding tax on 60 essential commodities—including rice, wheat, potatoes, onions, garlic, ginger, salt, sugar, edible oil, pulses, poultry, fish and dairy—from 5%, 2% or 1% to a flat 0.5%.
It also proposed withdrawing a 5% regulatory duty on all spices and date imports.
Healthcare
The budget proposes waiving 15% VAT and 5% advance income tax on dialysis filters, cutting cost per session by around Tk 800. The 7.5% advance tax on blood tubing sets has been removed.
A 10% VAT on imported heart stents and intraocular lenses has been withdrawn, expected to reduce prices by Tk 20,000 and Tk 5,000 respectively.
All duties and taxes have been waived on 21 categories of assistive devices for persons with disabilities, including mobility aids. Import duty on mortuary chambers is reduced from 25% to 1%.
Electric vehicles and energy
The total tax burden on imported EVs is proposed to be cut from 93% to 64% for vehicles up to $25,000 and to 80% for those up to $50,000. All taxes on EV chargers and charging stations are withdrawn.
For locally assembled EVs—including cars, buses, three-wheelers and trucks—raw material imports will face 3% customs duty, with other levies waived through FY2030–31.
Advance income tax on EV registration is reduced from Tk 2 lakh to Tk 25,000–1 lakh based on motor capacity.
Electric buses and trucks used in educational transport are fully exempt from duties until June 30, 2030.
Solar electricity production will be taxed at zero until 2035, with a 5% rebate for consumers paying solar bills.
Pharmaceuticals
Import duties are removed on 51 raw materials for Active Pharmaceutical Ingredients (APIs), while 17 additional inputs are placed under zero-duty concession.
Nine inputs for cancer drugs are also brought under zero customs and VAT, aimed at lowering treatment costs.
The government said it will maintain tax support for pharmaceuticals after Bangladesh graduates from LDC status.
Technology and telecoms
All duties and VAT on laptops, desktops, servers, printers and monitors are removed. SSDs retain a 5% customs duty only.
Advance tax on computer-related imports is reduced from 5% to 2%.
The Tk 300 SIM card tax is scrapped, with the government citing a 50% effective tax burden on telecoms. Mobile network withholding tax is cut from 12% to 10%.
Semiconductor design, testing and packaging imports will face a maximum 1% customs duty, with other taxes waived through June 30, 2031.
SMEs and startups
Turnover tax exemption is raised to Tk 50 lakh, and Tk 70 lakh for women and persons with disabilities.
Content creation income, freelancing and digital work are made VAT-exempt. Startups receive full VAT exemption on services and rent until June 30, 2035, and turnover tax is set at zero.
Agriculture and industry
VAT on fertiliser trade is waived. The 7.5% advance tax on pesticide imports is removed.
Customs duty on zinc ash is cut to zero. Three raw materials for poultry, dairy and fish feed are added to zero-duty lists. Equipment for poultry production also receives duty-free component imports.
Infant food preparation materials see import duty cut from 15% to 10%.
Shipbuilding and dredger concessions are extended to June 30, 2030. Lithium-ion and sodium-ion battery production incentives continue through FY2029–30, while EV battery components are extended to June 2028.
Musical instruments, including guitars, pianos and violins, are exempted from a 5% regulatory duty. Cinematographic camera duty is cut from 15% to 5%, with full exemption on components.
Tobacco
Minimum retail cigarette prices are raised to Tk 62, Tk 92, Tk 160 and Tk 210 per 10 sticks, with higher supplementary duties.
Nicotine pouches (Tk 500 per 10 grams, 40% duty) and heated tobacco (Tk 210 per 10 sticks, 67% duty) are brought under a new tax structure. A track-and-trace system will monitor production.
Income tax
The tax-free income threshold is raised from Tk 3,50,000 to Tk 3,75,000 for FY2026–27 and FY2027–28, rising gradually to Tk 4,50,000 by FY2030–31.
For women and citizens above 65, the ceiling rises to Tk 5,00,000 by FY2030–31.
A five-year tax roadmap will be introduced for predictability.
