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Major fiscal measures in new budget

Controversial 'minimum value' imposition on imports may go

DOULOT AKTER MALA | May 28, 2025 00:00:00


A long-despised fiscal measure styled 'minimum value' provision in the customs act is up for getting axed to allow importers to assess transactional value for imposition of duty taxes, sources said.

The much-debated provision has affected competitiveness and capital flow of the businesses for long as customs officials were empowered to fix a minimum import value of goods to impose duty taxes on that.

In that case, as higher value is set as minimum value, many of the importers have to pay duty on the assessed value much higher than that of their purchase value.

Also, newspaper industry is likely to see a cut in import duty on newsprint. The rate of customs duty might be cut to 3.0 per cent from the existing 5.0 per cent.

Small savers having up to Tk 0.3 million worth of bank deposits will be exempted from payment of excise duty from the upcoming fiscal year, sources familiar with the developments told the FE, preferring anonymity.

Currently, Tk 120 in excise duty is levied on Tk 0.1-million bank deposits.

Contractors, procurement providers and clearing and forwarding agents would get a great relief on VAT-return submission next year under the budgetary measurers crafted by the interim government.

They would be able to submit VAT returns twice a year instead of existing monthly return.

Also, fines on delay in submission of VAT returns have been lowered to Tk 4,000 instead of exiting 60,000 per year.

The VAT on ballpoint pen would be waived at trading stage.

The OTT platform may see a substantial hike as new 15-percent VAT and 10-percent Supplementary Duty would be imposed on the new services.

Also, mobile-tower service would come under the purview of 15-percent VAT.

Those are the major fiscal measures Finance Adviser Dr Salehuddin Ahmed is going to announce on June 2, 2025.

The revenue board will also phase out measures like tariff value, specific duty on import of clinker, petroleum and scraps. Customs duty would be imposed instead of such variable methods of duty calculation.

Import of e-bike would also get tax benefit in the upcoming fiscal year as the government opts for environment-friendly vehicles.

To placate Trump's tariff-hike move, the interim government may also waive taxes on 100 import items from the United States.

National Board of Revenue (NBR) officials say the customs wing has taken preparation through budgetary measures suiting Bangladesh's graduation to middle-income country due next year.

Chairman of the Policy Research Institute (PRI) Dr Zaidi Sattar says a large agenda of tariff reforms waits in the forthcoming FY 2026 budget.

"Our expectations are high because of hardly any traction observed in the last 15-plus years. First, tariffs must be rationalised and lowered," he told the FE.

Because, in the past three years, consumers have been pummeled by high tariffs, exchange-rate depreciation, and persistent inflation, he added.

Second, anti-export bias of tariff protection has remained a binding constraint for expansion of non-RMG exports and export diversification, Dr Sattar notes.

Third, he mentions, most of the supplementary duties on imports have to be lowered or rationalized in order to become WTO-compliant - and trade neutral, i.e. equally applied on imports and domestic production.

"It is good to hear that non-compliant and non-transparent customs methods like minimum price, tariff value and specific duties are being completely phased out," he says.

Application fees for VAT consultant would be cut to Tk 1000 from existing Tk 5000.

doulotakter11@gmail.com


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