Despite the reduction of duties and taxes on more than 50 essential items—including agricultural products, solar equipment, computers, electrical goods, and spices—in the current FY27 budget, the benefits are not reaching the market.
Prices of most items remain unchanged, while some have unexpectedly increased.
Consequently, the tax exemptions are failing to translate into lower prices for consumers at the retail level.
However, traders justify the price hikes citing various factors, including the conflict in the Middle East, rising fuel costs, domestic energy shortages, floods, and heavy rainfall.
Experts emphasize that merely reducing or waiving taxes is insufficient; it is crucial to analyze and monitor whether the benefits actually reach the consumer level.
The new government's first budget was presented on June 11. It reduced taxes on 63 essential commodities.
Duty was completely withdrawn on all imported spices. Source tax on the import and supply stages of around 60 basic agricultural and consumer items—including rice, flour, wheat, pulses, potatoes, onions, garlic, ginger, salt, sugar, and edible oil—was lowered to 0.5%.
According to data from the Trading Corporation of Bangladesh (TCB) as of September 11, loose soybean oil prices rose by 11.40% year-on-year, while bottled soybean oil prices increased by 6% to 9%.
Prices of various spices increased by 10% to 16%, sugar by 2.27%, and standard-quality dates by 16.88%.
On September 2, the Ministry of Commerce approved a traders' proposal to increase the price of bottled soybean oil by Tk5 per liter. Previously priced at Tk199 per liter, bottled soybean oil now costs Tk204, following an initial proposal by traders to raise the price by Tk10.
In the retail market, coarse rice is selling at Tk52–55 per kg, BR-28 rice at Tk60, Miniket at Tk72, Nazirshail at Tk88, and Katari Nazir at Tk85 per kg.
However, Miniket prices vary depending on brand and quality. Wholesale traders also report price hikes, noting that a 50 kg sack of Miniket rice rose by about Tk50-60 over the past week.
Industry sources report that while general rice prices fluctuate, aromatic rice prices have surged significantly. Aromatic rice brands that sold for Tk160–200 per kg a month ago have now climbed to Tk170–215 per kg.
Other industries feel the pinch
The budget also granted tax benefits to laptops, desktop computers, servers, printers, and monitors.
Minimum tariff values were reduced across seven product categories, including lipsticks, skin creams, moisturizing lotions, and face washes.
Tax exemptions were also extended to medical equipment, electric vehicles, and solar products. Yet, positive market impacts remain largely unseen.
The country has been facing a severe energy crisis for several months. Reduced power generation has led to nationwide load-shedding, negatively impacting industries.
Consequently, many are turning to solar power as an alternative energy source.
However, despite duty and tax cuts, prices for solar products in Dhaka markets have not dropped; instead, increased demand has pushed prices higher in some cases.
A field visit to Nawabpur, Kaptan Bazar, Sundarban Square, and Gulistan Stadium markets revealed that a 550-watt solar panel sells for Tk13,500-19,500.
A 5-kW inverter costs between Tk48,000 and Tk77,000, while a 5.12 kWh lithium battery ranges from Tk98,000 to Tk130,000.
Purchasing these three core components alone costs between Tk160,000 and Tk225,000.
Furthermore, a 2,000 to 2,500-watt solar hybrid setup sells for Tk150,000 to Tk200,000.
Contrary to expectations of lower costs post-tax cuts, buyers are paying just as much or more.
Under the National Board of Revenue's (NBR) measures for the new fiscal year, import duty on lithium-ion batteries was reduced from 25% to zero, and solar panel duty was cut from 1% to zero.
Solar inverters were also granted complete duty exemption, along with conditional relief on steel and aluminum mounting structures, battery cells, and battery packs.
In the tech market, 8 GB DDR4 RAM sells for Tk6,000-8,000. Certain models of 16 GB DDR5 RAM, which cost roughly Tk12,000 to Tk16,000 in June, have climbed to nearly Tk28,000-33,000.
The price of a 512 GB SSD increased from around Tk5,000–7,000 in June to Tk9,000–Tk10,000 currently.
Entry-level 2 GB graphics cards range from Tk5,500 to Tk11,000.
However, industry sources note that computer monitor prices have decreased by about 20% due to tax cuts.
SM Nazer Hossain, vice president of the Consumers Association of Bangladesh (CAB), stated that tax cuts have had no tangible impact on retail markets, where prices have not decreased by a single penny.
He urged the government to monitor whether tax concessions—worth thousands of crores of Taka—are reaching ordinary consumers or being siphoned off by intermediaries.
