BD pursues aggressive tariff overhaul

Bangladesh adopts a time-bound implementation roadmap on aggressive tariff overhauls, including deep cuts, to rationalize the country's trade regime to play tidily on the global market in post-graduation era.
The government has formally adopted the roadmap in its National Tariff Policy (NTP), sources have said, as time ticks past towards the cutoff time for Bangladesh's graduation from the world's poor-country club.
The blueprint outlines a decisive roadmap for tariff rationalization, reduction in import dependence, bolstering domestic industry competitiveness, and expansion of exports-all essential steps to mitigate the challenges of losing LDC-specific trade privileges after Bangladesh graduates from the status of a least-developed country (LDC) on November 24, 2026.
The NTP itself, titled 'National Tariff Policy', was issued through a gazette on August 10, 2023 by the then government.
Some tariff structures under the NTP have already been implemented in the budgets for the financial years (FY) 2024-25 and 2025-26.
The implementation plan sets ambitious deadlines for deep structural reforms, stretching through 2031, centered on compliance with World Trade Organization (WTO) rules and simplifying the trade and business environment.
The core policy also dictates a gradual reduction in customs duties to a rational level for consumer welfare and a lowering of the tariff- reflection rate to boost the competitiveness of different local industries.
According to the drawn-up plan, all customs duties and taxes are slated to be fully consistent with Bangladesh's WTO-committed tariff rates (Bound Rate) by June 30, 2026.
The total import duty-tax rate (Customs Duty + Regulatory Duty + Supplementary Duty) is currently 26.15 per cent.
The long-term policy aims to drastically reduce the relative rate of total duty-tax to 25 per cent, 23 per cent, 21 per cent, and 19 by FYs 2026-27, 2027-28, 2028-29, and 2029-30 respectively, aligning with the global trade norm of lower tariffs to benefit consumers and enhance business efficiency.
The use of Regularity Duty or RD will be restricted to only emergencies. The withdrawal or adjustment process for the currently imposed RD on 3,236 HS Codes will be initiated, with a target of adjusting or withdrawing RD on 1036 HS Codes by FY 2030-31.
The implementation plan has been prepared according to the articles 7.1.1 under the NTP. The National Board of Review (NBR) has sent the deadline to the state agencies concerned, including commerce ministry, for the next course of action.
A critical measure for exporters is the plan to automate the Duty Drawback process by June 2027 to ensure the timely and easy refund of all duties and taxes paid on raw materials used in export-product production.
The policy strictly mandates the avoidance of "user-specific duty concessions," including the cancellation of preferential tariff rates for MSME (Micro, Small, and Medium Enterprises) by June 2027, promoting a level playing field.
Industries producing for both local and export markets will receive a 100-percent duty concession on raw materials imported solely for export production, with a mechanism for "bank-guaranteeing" the correct duty benefit to be finalized by June 2026.
Bangladesh Trade and Tariff Commission (BTTC) will continue to provide research-based, supportive protection to new entrepreneurs and "Infant Industries", following the Protective Duties Act 1950.
To ensure transparency and ease of access to customs and tax facilities, the government has set a firm deadline of June 2026 to complete all types of automation activities in the customs system, expecting to simplify procedures for industries and businesses, significantly boosting the country's ease-of-doing-business index.
The Minimum Import Value (MIV) currently fixed for 12 products. It will be withdrawn from the next budget. The government withdrew the MIV of 72 products already.
Awareness on the use of trade-remedy tools like Anti-Dumping, Countervailing, and Safeguard Duties will be raised by June 2026, to mitigate loss to domestic industries from unfair imports.
According to the deadline, the policy plans the single-largest category of reductions with the Supplementary Duty lowered on 448 items in FY 2025-26, aiming to reduce the overall burden of para-tariffs.
The withdrawal of Import Duties on 97 products and the reduction on 60 products in the latter year will significantly lower the protective wall around local industries, forcing them to become more competitive ahead of LDC graduation.
The plan mentions that the government, through the National Board of Revenue, has stated that this time-bound plan is essential to addressing the multifaceted challenges that LDC graduation will bring, particularly the loss of preferential market access in key trading blocs.

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