TBM Report
Finance Minister Amir Khasru Mahmud Chowdhury officially presented a massive BDT 9.38 trillion national budget for the upcoming Fiscal Year 2026-27 in the National Parliament on Thursday. Designed under the leadership of Prime Minister Tarique Rahman, the newly proposed fiscal framework introduces substantial customs duties and value-added tax (VAT) exemptions aimed at cushioning low-income consumers against global inflation. However, to bridge a projected fiscal deficit of BDT 2.43 trillion, the government has concurrently introduced restrictive tax structures on non-essential luxuries, imported electronic appliances, and tobacco products.
Under the fresh tariff rationalization scheme, the advance income tax (AIT) on critical agrarian inputs and primary consumer stables—including onions, garlic, ginger, poultry, edible oils, and sugar—has been slashed to a nominal 0.5%. Furthermore, the government completely waived all regulatory duties on imported spices and dates, while significantly dropping the customs tariff on raw materials for infant formula from 15% to 10%. In a landmark move to foster digital inclusion, the budget offers a 100% tax and VAT holiday for laptops, desktop computers, servers, and monitors, alongside the total abolition of the BDT 300 tax levied on new mobile SIM cards. Medical expenses are also poised to decrease as the administration eliminated VAT and advance taxes on kidney dialysis filters, intraocular lenses, cardiac stents, and 68 critical raw materials utilized in oncological medications.
Conversely, the national exchequer has imposed aggressive tax hikes on the tobacco sector to curb consumption and generate internal revenues. The minimum retail price for a 10-stick pack of low-tier cigarettes will rise to BDT 62, while premium-tier offerings will surge to BDT 210, complemented by a staggering 350% supplementary duty on nicotine pouches. The automotive sector faces similar headwinds, with the cumulative tax rate on mid-range passenger vehicles (1200cc to 1600cc) hiking from 132.36% to 155.88%. Additionally, import-dependent consumer goods, including cashews (25% tariff), premium frozen fish, and foreign household washing machines (20% supplementary duty), will witness severe price escalations.
Industrial and infrastructural development projects are also projected to become more expensive due to fiscal adjustments. The production-level VAT on MS steel rods has been hiked by nearly 10%, while regulatory duties on essential electrical and construction raw materials—such as copper wires, copper tubes, and cold-rolled sheets—have been elevated to protect domestic industries. Additionally, the operational costs of commercial eateries are expected to increase marginally following the elevation of customs duties from 10% to 25% on food-grade greaseproof packaging papers, impacting overall dining expenses for urban consumers.
 exemptions aimed at cushioning low-income consumers against global inflation. However, to bridge a projected fiscal deficit of BDT 2.43 trillion, the government has concurrently introduced restrictive tax structures on non-essential luxuries, imported electronic appliances, and tobacco products.){kind=link}