The upcoming budget for the fiscal year 2024-25 in Bangladesh is expected to increase indirect taxes on imports. Additionally, zero-tariff goods and services will now face duties. As a result, the prices of several essential goods, including food items, are likely to rise.
Here’s a breakdown of the items expected to see price hikes in the forthcoming budget:
Cigarettes
As in previous years, the budget will increase supplementary duties and price levels on cigarette production. Consequently, the price of all types of cigarettes will rise.
Mobile Phone SIM Cards and Calls
The tax on the sale of SIM cards by mobile operators might increase from BDT 200 to BDT 300, leading to higher SIM card prices for consumers. Additionally, extending the tax collection scope will make mobile phone calls more expensive. Currently, consumers get BDT 73 worth of talk time from a BDT 100 recharge, with the remaining BDT 27 deducted as VAT and supplementary duty. If the proposed budget raises the supplementary duty on mobile services by 5%, users will get only BDT 69.35 of talk time.
Cars
Members of Parliament (MPs) might lose their duty-free car import privileges in the 2024-25 budget. To reduce disparities, the proposed budget will require MPs to pay 25% supplementary duty and 15% VAT on car imports. Additionally, to prevent luxury car tax evasion, specific conditions will be introduced for hybrid and non-hybrid car clearance, potentially increasing the prices of luxury cars.
Soft Drinks and Energy Drinks
VAT on soft drinks, carbonated beverages, and energy drinks might rise from 5% to 10%. Additionally, the minimum tax on carbonated beverages may increase from 3% to 5%. This will result in higher prices for these products.
Amusement Parks
The current VAT on entry and rides at amusement and theme parks is 7.5%. This rate is set to increase to 15%, raising the cost of visiting these parks.
Rice, Edible Oil, and Medicine
The upcoming budget will increase import duties, supplementary duties, and VAT on imports. As a result, 335 basic goods will no longer be duty-free, including basmati rice, wheat, fuel, fertilizers, seeds, soybean oil, palm oil, gas, and medicines. The rise in wheat prices will also drive up the cost of flour.
Cashew Nuts
To protect local cashew nut cultivation, the import duty on shelled cashew nuts will rise from 5% to 10%, leading to higher cashew nut prices.
Air Conditioners (AC)
The budget will consider air conditioners as luxury items and increase duties on compressors and all components used in AC production. Economists predict this will drive up AC prices.
Refrigerator Production Costs
The government has provided VAT exemptions for the electronics sector, including refrigerators, for several years. However, this exemption will end on June 30, and VAT may increase from 5% to 10% in the new fiscal year, raising production costs.
Water Filters
Import duties on water filters used in households will increase from 10% to 15% as domestic production rises. This will result in higher prices for household water filters.
LED Bulbs
The price of LED bulbs may rise soon due to a 10% increase in import duties on materials used in their production.
CNG-LPG Conversion Costs
The rise in fuel prices has led to increased CNG-LPG conversions, prompting the National Board of Revenue (NBR) to focus on revenue collection. Import duties on kits, cylinders, and other equipment for vehicle conversions will rise from 3% to 5%, increasing conversion costs.
Generators
With the increasing use of generators in homes and industries to combat load shedding, the NBR is also targeting this sector. A 1% duty will be imposed on parts and components used in generator assembly and production, potentially raising generator prices in the domestic market.
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