What May Cost Less? 2025-26 Budget Holds Answers for Consumer

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Publish : 02 Jun 2025, 09:05 AM

The proposed National Budget for the 2025-26 fiscal year will be presented on Monday, June 2. Interim government Finance Advisor Salehuddin Ahmed is set to announce the budget at 3:00 PM.

The proposed budget, totaling BDT 7.90 trillion, aims for a revenue collection target of BDT 4.99 trillion.

The budget speech will be broadcast live on Bangladesh Betar and Television at 3:00 PM.

During this announcement, proposals to increase or decrease customs duties and VAT on various products may be made, which could lead to price changes for certain goods. Some product prices are expected to decrease.

Products That May See Price Reductions:
VAT Withdrawal on LNG Imports
The proposed budget is expected to withdraw the 15% VAT on LNG imports. Currently, a 15% VAT and 2% advance tax are levied during LNG import.

Additionally, a 15% VAT and 2% withholding tax are applied during sales to consumers. Furthermore, a 5% withholding tax is deducted from gas distribution companies when paying LNG margin bills.

Reduced Duties on Fuel Oil
Customs duty on crude fuel oil may be reduced from 5% to 1%, and duties on other fuel imports may be cut from 10% to 3%. This could lead to a slight decrease in fuel prices.

The proposed budget may also include proposals to reduce duties on imported raw materials and machinery for local industries such as tires, tubes, brake shoes, brake pads, marble, and granite production.

Duty Exemptions for Leather Industry
Various chemical components are crucial for processing animal hides during the upcoming Eid-ul-Adha. It is also essential to keep these materials affordable for the promising leather industry year-round.

Considering this, a proposal may be made to reduce duties on some chemical components for the leather industry from 5% to 1%.

Reduced Withholding Tax on LCs for Essential Goods
While withholding tax on essential commodity imports does not significantly impact revenue collection or product prices, some businesses use it as an excuse to inflate prices.

Taking this into account, a decision to reduce the withholding tax or source tax in the upcoming budget may be announced. To keep prices of essential goods affordable, the withholding tax on local letter of credit (LC) commissions will be halved in the next budget from the current 1%.

Essential goods include rice, wheat, potatoes, onions, garlic, peas, chickpeas, lentils, ginger, turmeric, dried chilies, pulses, corn, coarse flour, fine flour, salt, sugar, edible oil, black pepper, cinnamon, nuts, cloves, dates, cassia leaves, computers and computer parts, and all types of fruits. Consequently, prices of these products may decrease, which would be good news for the general public.

Lower Taxes on Land Registration
According to NBR sources, some concessions are expected in land registration in the upcoming budget. Registration fees and taxes will be determined per percentage (of land) instead of per katha. Advance tax on land registration may also be slightly reduced.

Officials believe this will not decrease the overall tax burden on land or property registration. In the last fiscal year, NBR collected approximately BDT 6.5 billion in taxes from land registration.

Reduced Import Duty on Sugar
To maintain stable and affordable sugar prices, the government has, at various times, taken initiatives to reduce existing duties and taxes on raw and refined sugar.

It is reported that the proposed budget will include a proposal to reduce the import duty on refined sugar from BDT 4,500 per ton to BDT 4,000 per ton to stabilize sugar market prices.

Duty Reduction on Raw Materials for Soybean and Paper Industries
The proposed budget includes proposals to reduce duties on imported raw materials or components for soybean mills and the paper industry to support domestic industrial establishment and development. There is also a proposal for duty relief on neutralized soybean oil.

Furthermore, it is reported that proposals to reduce duties on essential raw materials for the construction industry, such as phenolic resin and sandpaper, from 10% to 5% are being considered.

Cheaper Newsprint for Newspapers
Related organizations, including NOAB, had proposed reducing customs duty on newsprint imports used in the newspaper industry. In response to this and to further support domestic media, the proposed budget is considering a reduction in customs duty on newsprint imports from 5% to 3%.

Affordable Cricket Bats
Cricket is a popular sport in the country, and cricket bats are now produced domestically. Bat manufacturers are trying to meet local demand and export abroad. The government also aims to make bats available at affordable prices at the grassroots level.

For this purpose, duties on imported wood for bat manufacturing may decrease. The total duty rate on imported wood for bat making is currently 37%, which may be reduced to 26% in the next budget.

Increased Benefits for Domestic Software Development
Local IT firms and freelancers use foreign operating systems, databases, development tools, and security software to create software.

Additionally, domestically produced software is exported. To further incentivize exports, a proposal may be made in the budget to reduce import duties on foreign-sourced operating systems, databases, development tools, and security software from 10% to 5%.

VAT Withdrawal on Clay and Leaf Products
A proposal is coming to exempt VAT on pottery and leaf-made utensils. Currently, these products have a 15% VAT, which is proposed to be withdrawn in the budget, according to NBR sources.

Foreign Juices
The proposed budget may also include a proposal to reduce the supplementary duty on imported non-alcoholic juices from 150% to 100%. This could lead to relatively lower prices for foreign juices.

PVC Pipes and Copper Wire
Although PVC pipes are produced domestically, their components must be imported. PVC pipes are used in all types of infrastructure work. To control the price of these pipes, the import duty on their components is being reduced from 25% to 15%.

The same action is being taken for copper wire, with customs duty on imported components for this product being reduced from 15% to 5% in the proposed budget.

Additionally, the proposed budget includes proposals to reduce duties on imported raw materials and machinery for transportation tires, tubes, brake shoes, brake pads, marble, and granite. Concerned parties believe this could have a positive impact on consumer prices.

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