The proposed national budget for FY27 has introduced fiscal measures expected to accelerate the growth of electronics and automobile enterprises such as Walton Hi-Tech Industries and Runner Automobiles.
In a bid to steer the country toward environment-friendly transport, the government has dismantled the rigid, high-cost registration barrier for electric four-wheelers.
Previously, a flat Advance Income Tax (AIT) of Tk 200,000 was levied across the board during registration with the Bangladesh Road Transport Authority and at annual renewals. The proposed budget introduces a capacity-linked reduction in this source tax. For vehicles with 200 KW capacity, the tax drops from Tk 0.2 million to Tk 25,000. For those with 300 KW capacity, it falls to Tk 50,000, and is capped at Tk 75,000 for EVs with 400 KW capacity.
Shanat Datta, Chief Financial Officer of Runner, said the proposed budget delivers a profoundly positive impact for automobile manufacturers in Bangladesh.
"As an established player, Runner already possesses the manufacturing infrastructure, advanced facilities, and technical capabilities required to seamlessly accommodate these fiscal benefits within our existing brand portfolio. This policy will directly catalyze the retail segment by significantly driving down the end-consumer acquisition cost. More importantly, it provides us with the perfect runway to fully leverage our manufacturing excellence to scale up and lead the domestic EV segment," said Mr Datta.
Local EV assembly and e-bike ecosystem handed duty holidays until 2031
The budget has introduced a performance-linked tariff structure designed to
transform Bangladesh into a localised hub for electric vehicle (EV) and e-bike production, with tax exemptions extended until June 30, 2031.
Under the newly unveiled policy, companies achieving high local value addition - specifically those undertaking end-to-end local body manufacturing, welding, painting and assembly of three-wheelers and four-wheelers - will enjoy a near-total tax holiday. The government has proposed waiving all import duties and taxes on components and raw materials, retaining only a nominal 3 per cent import duty. For lower-tier operations focused on basic parts assembly and painting, a 15 per cent import duty will apply, with all other import taxes fully waived.
The heavy commercial EV sector is also receiving a significant push. Local manufacturers of electric buses and trucks will be fully exempted from all import customs duties and taxes, and will face no more than a capped 5 per cent VAT on imported raw materials and components.
Boosting the e-bike supply chain
To nurture a localised ancillary ecosystem, the budget extends fiscal concessions beyond main brand assemblers. For the first time, local component vendors manufacturing parts and sub-assemblies for e-bikes will receive the same duty-free and concessional import privileges for raw materials as primary e-bike manufacturers.
However, the budget introduces a strict timeline to accelerate the localisation of deep-tech components. Concessional import benefits currently enjoyed by local factories for critical infrastructure units - such as mounting structures, lithium cells, battery packs and Battery Energy Storage Systems (BESS) - will be fully withdrawn after June 30, 2028.
This sunset clause sends a clear signal to industry players like Walton and Runner: they have a two-year window to establish fully functional battery-cell and pack production lines before importing these components becomes substantially more expensive.
In addition, the budget has fully withdrawn the 5 per cent source tax (AIT) on imports of electric charging stations, eliminating a significant capital expenditure barrier for firms aiming to establish nationwide commercial charging networks.
Walton to benefit from VAT reduction on ACs and refrigerators
The country's leading electronics manufacturer stands to benefit from a production-stage VAT reduction to 7.5 per cent from 15 per cent on refrigerators, freezers, air conditioners and compressors, a concession that will remain in effect until June 30, 2030.
The company can either pass the savings on to consumers to stimulate mid-to-low-level demand or absorb the additional margin to offset rising global shipping costs and currency fluctuations.
A tariff wall against foreign competition
The budget has also laid out measures to protect local manufacturers from foreign competition. A 10 per cent Regulatory Duty (RD) has been imposed on imports of DC motors with capacities below 1,200 watts, penalising importers of foreign-made small motors and promoting domestic manufacturing of electronic powertrains and industrial components.
Across all manufacturing operations, the standard AIT on imports of industrial raw materials has also been reduced from 5 per cent to 4 per cent, freeing up working capital at the point of entry for heavy industrial manufacturers.
With industrial raw material costs lowered, core consumer product VAT halved and the electric vehicle segment heavily subsidised, the FY27 fiscal framework sets up a defensive and expansionary outlook for listed local engineering firms. As the Dhaka Stock Exchange processes these measures, analysts anticipate a positive long-term re-rating of top-tier manufacturing equities, driven by expectations of wider gross margins and robust volume growth through 2030.
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