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The interim government is set to reduce import duties on at least 100 types of goods in the upcoming budget, aiming to create a favourable ground for negotiations following the additional tariffs imposed by the United States.
Chief Advisor Muhammad Yunus gave provisional approval to this move during a meeting with the National Board of Revenue (NBR) on Monday.
The financial advisor, NBR chairman and senior officials from the Income Tax, value-added tax (VAT), and Customs policy branches as well as the first and second secretaries were in attendance.
The meeting began at 4:40pm and concluded around 7:10pm.
An official present at the meeting told bdnews24.com, “We proposed zero duties on 100 tariff lines, keeping in mind imports from the United States.
“He (Muhammad Yunus) then asked how we could apply this specifically to the US. We said it was not possible and explained to him that the tariff cuts would primarily benefit the US.”
A tariff line, identified by an HS (Harmonised System) code, refers to a specific customs duty rate assigned to one or more similar products.
Customs duties for imports are determined based on these codes.
The goods include nearly 15–16 items such as oil, gas, arms, fighter aircraft parts and missiles—products that are typically purchased only by the government or in order to lower the trade deficit.
Officials explained that since such government purchases come under special agreements with duty exemptions, there’s no risk of revenue loss in these cases.
In addition, the chief advisor said taxes must not be imposed in areas where revenue potential is low and where it could raise pressure on the general public or create political unrest.
The directive led to proposals in the budget to increase the individual tax-free income threshold. Though the corporate tax rate will remain unchanged, the head of the caretaker government also approved the proposal of some flexibility in compliance requirements.
A notable policy shift includes removing tax exemptions in fisheries, dairy, and poultry sectors—areas where political and administrative elites have often invested to gain tax advantages.
The facility allowing investment of undisclosed income, or black money, in the purchase of houses, flats, and apartments will continue into the next fiscal year.
Although the corporate tax rate may increase, turnover tax is set to double.
A minimum tax of Tk 5,000 will be imposed on all individual taxpayers who fall within the tax net, while the highest personal tax rate will be raised to 30 percent—a move that has also received approval on-principle.
The finance advisor is scheduled to propose the budget for the upcoming fiscal year in the form of an ordinance through state televisions on Jun 2. VAT and customs provisions will come into effect immediately.
Unlike regular years, the budget won’t be discussed in the parliament due to its absence this time. Instead, public discussion, talk shows, and reactions will help shape any necessary adjustments, which will later be formalised by passing the ordinance as the Finance Act.