Price relief for essential goods, digi tech
Finance Minister Amir Khosru Mahmud Chowdhury presented the national budget for the 2026-27 fiscal year on Thursday, introducing a series of tax adjustments designed to lower the cost of living and support domestic industry.
The government’s fiscal strategy focuses on reducing the financial burden on ordinary citizens by slashing taxes on essential food items, medical equipment, and digital technology, while simultaneously increasing duties on luxury goods, tobacco, and fossil-fuel vehicles to discourage harmful consumption and protect the environment.
To combat persistent inflation and improve the living standards of ordinary citizens, the government has proposed significant tax relief on essential commodities, medical supplies, and digital technology.
Essential Commodities:
The withholding tax on sixty essential items has been slashed from rates of up to 5 per cent down to just 0.5 per cent.
This extensive list includes paddy, rice, wheat, potatoes, livestock, poultry, fish, onions, garlic, ginger, salt, sugar, edible oils, and various seeds.
Furthermore, fertilisers and agricultural pesticides have been granted full VAT and Advance Tax exemptions to reduce production costs for farmers.
Healthcare and Assistive Devices:
In a major move for public health, the 15 per cent VAT on cardiac stents and intraocular lenses has been removed, which is expected to reduce the price of a stent by Tk 20,000. Kidney dialysis filters will also become cheaper following the withdrawal of the 15 per cent VAT and 5 per cent Advance Income Tax.
Additionally, twenty-one types of special assistive devices for persons with disabilities-including Braille paper, walking sticks, Braille printers, and cochlear implants-are now fully exempt from all import duties and taxes.
Digital Technology and Green Energy:
To support the ICT sector, the Tk 300 specific tax on mobile SIM cards has been completely withdrawn.
Duties and VAT have also been removed from laptops, desktop computers, printers, and monitors.
To encourage green transport, the total tax incidence on electric vehicles (EVs) priced up to USD 25,000 has been reduced from 93 per cent to 64 per cent, while EV chargers and charging stations will now attract zero tax.
Products Set to Increase in Price
Conversely, the budget seeks to generate revenue and discourage harmful consumption by increasing duties on tobacco, alcohol, and fossil-fuel-dependent goods.
Tobacco and Alcohol:
Minimum retail prices for cigarettes have been increased across all tiers: Tk 62 for low-tier, Tk 92 for medium-tier, Tk 160 for high-tier, and Tk 210 for premium-tier packs of ten sticks.
Nicotine pouches and granules will face a steep 350 per cent supplementary duty. Additionally, a new specific VAT of Tk 500 per litre has been imposed on locally produced alcohol.
Fossil-Fuel Vehicles and Luxury Goods:
To promote environmental sustainability, the total tax incidence on internal combustion engine vehicles (1200cc to 1600cc) has been raised from 132.36 per cent to 155.88 per cent.
Prices for imported pangas fish fillets will rise due to a new 20 per cent supplementary duty, and cashew nuts will see higher prices as import duties have been increased to 25 per cent to protect domestic growers.
Industrial Materials:
Several industrial products will become more expensive to protect local manufacturers, including gypsum boards and sheets (20 per cent regulatory duty), PVC and PET resins (import duty increased to 10 per cent), and oxygen and nitrogen gases (regulatory duty increased to 20 per cent).
This fiscal plan represents a bold departure from debt-driven growth models of the past. By prioritising quality over physical structures and providing direct relief to the vulnerable through the Family Card Programme, the government aims to translate the demographic dividend into a lasting “Democratic Dividend”.
The Finance Minister emphasised that this budget is a foundational step toward a self-reliant and dignified Bangladesh.
