Finance Minister Abul Hassan Mahmood Ali today (June 6) placed the national budget of Tk 7, 97,000 crore for the next fiscal year (FY25) at Jatiya Sangsad (JS).

This budget was the country's 53rd budget and the 25th of the Awami League (AL) government in six terms. This budget will also be the 21st under the rule of Prime Minister Sheikh Hasina in different terms.

This budget for FY25 will be the maiden budget of incumbent Finance Minister AH Mahmood Ali.

The theme of the budget for the next fiscal year would be "Pledge towards building a happy, prosperous, developed, and smart Bangladesh" in pursuit of turning the country's economy into its previous sound state.

Mahmood Ali will presented the budget for the financial year 2024-25 in the presence of Prime Minister Sheikh Hasina under the chairmanship of Speaker Dr. Shirin Sharmin Chaudhury in the National Parliament at 3 pm.  

The proposed budget for the fiscal year 2024-25 proposed hikes in duties and value-added tax (VAT) on various products and services, leading to price increases. In contrast, some products will become less expensive due to VAT and duty reductions.

Products getting costlier

Mobile SIM cards: The tax on SIM card sales by mobile operators will increase from Tk200 to Tk300, raising SIM card prices. Currently, a consumer can talk for Tk73 from a Tk100 mobile recharge, with the remaining Tk27 deducted as VAT and supplementary duties. If the proposed budget increases the 5% supplementary duty on mobile services, the talk time will reduce to Tk69.35.

Cigarettes: Supplementary duty and price levels on cigarette production are set to increase, pushing up cigarette prices.

Cars: Lawmakers currently can import cars duty-free. The budget proposes a 25% supplementary duty and 15% VAT on car imports for parliamentarians, while adding conditions to exempt hybrid and non-hybrid cars, likely increasing luxury car prices.

Air conditioners: Duties on compressors and materials used in AC production are set to rise, increasing AC prices.

Refrigerators: VAT exemption on refrigerator production ended on 30 June. The VAT rate will rise from 5% to 10%, increasing refrigerator prices.

Generators: A 1% duty on materials and parts for generator assembly and manufacture is proposed, likely increasing generator prices.

CNG-LPG conversion: Import duty on parts for converting vehicles to CNG-LPG will rise from 3% to 5%, increasing conversion costs.

Security services: VAT on security services may rise from 10% to 15%, increasing costs in cities like Dhaka.

Lease of Hat-Bazar: Lease prices at district, upazila, and union levels, along with land registration fees, will increase slightly to boost non-tax revenue.

Hospital equipment: Duty on over 200 medical devices and equipment may increase from 1% to 10%, raising medical expenses for critically ill patients.

Water filters: Import duty on household water filters may increase from 10% to 15%, raising prices.

LED bulbs: A 10% duty increase on materials for LED and energy-saving bulbs will likely increase prices.

Soft Drinks: VAT on soft drinks and carbonated beverages may rise from 5% to 10%, with a minimum tax increase from 2% to 5%, raising prices.

Cashew nuts: Import duty on shelled cashew nuts may increase from 5% to 10% to protect local cultivation, raising prices.

Products getting cheaper

Daily Essentials: Withholding tax on the supply of at least 30 essential commodities and foodgrains will be reduced from 2% to 1%. This includes items like onion, garlic, rice, wheat, maize, flour, potatoes, lentils, edible oil, salt, sugar, and various spices, potentially lowering their prices.

Motorcycles: Import duty on CKD engine parts of domestically made motorcycles will be reduced, lowering the price of locally produced motorcycles.

Laptops: Total customs duty on laptops may be reduced from 31% to 20.50%, decreasing their prices.

Construction materials: Duty on manganese used for making rods, bars, and angles in construction will be reduced from 10% to 5%, lowering the prices of these materials.

Dengue kits: Concessional facilities for importing dengue kits will reduce their cost. NS-1 antigen test costs are set at Tk100 for government hospitals and Tk300 for private hospitals.

Cancer treatment costs: New raw materials for cancer treatment will be added under concessional import facilities, lowering treatment costs.

Electric motors: Subsidies on parts used in manufacturing electric motors will reduce their prices.

Kidney dialysis filters: Import duty on filters and circuits for kidney dialysis will be reduced from 10% to 1%, decreasing dialysis costs.

Carpets: Import duty on polypropylene yarn for making carpets will be reduced from 10% to 5%, lowering the prices of locally made carpets.

Powdered milk: Duty on packaged milk powder will be reduced from 89.32% to 58.60%, lowering its price. Bulk importers’ tax will be 37%.

Imported chocolates: Supplementary duty on chocolate imports will be reduced from 45% to 20%, decreasing their prices.

Budget bring no relief to the Internet and Mobile users

Finance Minister Abul Hasan Mahmud Ali during the proposed budget announcement increased supplementary duty on mobile phone calls and internet services.

Effective immediately, the supplementary duty has been raised by 5 percent, bringing the total VAT on talk time and internet services to 20 percent from the previous 15 percent. This increase will be applied at the time of mobile phone recharge.

This adjustment is expected to raise the cost of mobile phone calls and internet usage for all users. Mobile phones are widely used across various socioeconomic classes, serving as a primary means of communication and access to social media platforms such as Facebook, Messenger, and WhatsApp. Consequently, the increase in supplementary duty will affect the cost of these services.

Currently, to obtain 100 taka worth of talk time, consumers must recharge 133 taka and 25 paisa. With the new increase, this amount will rise to 139 taka for the same 100 taka talk time. For a recharge of 100 taka, 28 taka will now be deducted as duty-tax, leaving the customer with talk time equivalent to the remaining 72 taka.

BDST: 1812 HRS, JUNE 6, 2024
MSK