Finance Minister AHM Mustafa Kamal has proposed changes to duties on different products, which will result in an increase or decrease in their prices.
In the proposed budget, the prices of these products are expected to change:
Household items: The prices of various plastic and aluminum household items, including towels, toilet tissue, napkins, facial tissues/pocket tissues, and paper towels, and other essential products, are expected to increase as the Value Added Tax (VAT) rate on these items has been raised from 5% to 7.5%. Similarly, the VAT on aluminium-made household items and utensils has also been increased. This adjustment in VAT may lead to a potential hike in tissue paper prices.
Microwave oven: Import Duty on all types of ovens increased by 30%, total tax rate stands at 89.32%. This may lead to a rise in the prices of imported ovens.
Gas cylinders: Additional duties imposed on imported steel and welding wire for cylinder production in the budget, VAT increased at the production stage. This could potentially lead to price hikes in the cylinder market.
Basmati rice: Many people have a preference for indulging in biryani and tehari during their weekly holidays or festive occasions. However, enjoying these beloved dishes now comes with an additional cost. The main ingredient of biryani and tehari, basmati rice, is now subject to VAT upon import, leading to a potential increase in the price of rice. Consequently, the cost of biryani and tehari may also rise accordingly.
Cashew nuts: Many eat Cashew nuts for health benefits. To encourage cashew cultivation in the country, the import duty on cashew nuts has been increased from 15% to 43%. As a result, the price of imported cashew nuts may rise.
Dates: Many consume dates for good health. In the budget, a 25% duty is being imposed on the import of fresh and dried dates, along with an additional 15% VAT. This step is primarily taken to curb duty evasion. However, this move could potentially increase the price of dates.
Imported fruits: Tariffs on various types of fruits and nuts likely to increase.
Cigarette: The prices of all types of cigarettes may rise in the budget. The cost of a pack of low-tier cigarettes (such as Hollywood, Derby) is now Tk90, while mid-tier brands (like Star, Navy) cost Tk134. Premium brands (like Gold Leaf) are priced at Tk226, and the prices of top-tier cigarettes (such as Benson, Marlboro) have been set at Tk300. Additionally, the prices of tobacco-based products is set to increase as well. However, the prices of bidi may remain unchanged.
Mobile Phones: IMF recommendation leads to imposing VAT on mobile phones in the budget to increase revenue. Currently, mobile phone production receives VAT exemption, with a 2% VAT imposed. However, at the import stage, the VAT rate is increased from 3% to 5%, and an additional 5% to 7.5% VAT is imposed. As a result, the prices of mobile phones may increase soon.
Pen: The cost of purchasing pens for children will increase. Currently, there is no value-added tax (VAT) imposed on pen production, but there is a proposal to introduce a 15% VAT on pens. This could lead to an increase in the price of pens.
Eyewear: The import duty on eyewear frames and sunglasses has been raised from 5% to 25%, while the VAT on production has been increased from 5% to 7%. As a result, the prices of all types of eyewear are expected to escalate.
Bicycle: Tariffs on bicycle components are being increased, potentially leading to higher prices for environmentally-friendly modes of transportation.
Sand paper: The import tariffs on paper are also being raised, resulting in potential price hikes for paper products.
Glue: The imposition of additional taxes on broken items repair, such as glue or adhesive, may lead to increased costs. As a result, the prices of such products might rise.
Cars: New taxes could be imposed on luxury cars in the upcoming budget year. This may further increase the prices of luxury cars. Currently, a supplementary duty of 200% is imposed on cars imported from 2,001CC to 3,000CC. This could be increased by 250%, and for cars ranging from 3,001CC to 4,000CC, the applicable supplementary duty could be raised to 350%, an increase of 500%. Cars with an engine capacity exceeding 2,000CC are generally classified as SUVs. Currently, a large number of SUVs or SUV models are being imported into the country.
Building materials: Cost of house construction is expected to increase as well. The main ingredient for house construction, clinker, currently incurs a duty of Tk500 per tonne for import, which is being raised to Tk700 per tonne. This could lead to an increase in the price of cement. Imported tiles used in residential buildings are also facing a removal of tax benefits. As a result, the prices of imported tiles may rise. Although in the past year, the prices of rod, cement, bricks, and other materials have already increased. It is possible that VAT on certain cement products may increase in the upcoming budget.
Flat registration: Rajdhani Unnayan Kartripakkha (Rajuk) and Chittagong Development Authority (CDA) have increased the tax for land registration in the area, ranging from 3% to 4% and potentially reaching 4% to 5% respectively. Additionally, there may be an increase in the capital gains tax for flat sales. As a result, there will be additional expenses in both areas starting from the next fiscal year.
Foreign trip: In order to meet the increased demands in the budget for the fiscal year 2023-2024, the government is considering imposing an additional charge of Tk300-500 on travellers going abroad. This could lead to an increase in the costs of travelling to and from foreign countries. However, those who travel abroad for Hajj or medical purposes will continue to enjoy the same benefits as before.
