Tax relief on 7 beauty products including lipstick, cream, lotion and face wash

Last year, the interim government increased duty and tax burdens on beauty and personal care products. A year later, the new government has reversed course by reducing the minimum customs valuation on seven categories of products, including lipstick, skin cream, moisturising lotion and face wash.

The benefit has been provided in the proposed 2026–27 budget presented by Finance Minister Amir Khasru Mahmud Chowdhury in Parliament by lowering only the minimum customs valuation while keeping duty rates unchanged. This is expected to reduce costs for importers. If the benefit is passed on to the market, consumers may also receive some relief. However, government revenue could decline as a result.

Under the new budget, the minimum customs valuation on seven categories of products—lipstick, skin cream, moisturising lotion and four types of face wash—has been reduced by 25 to 30 per cent.

According to data from the National Board of Revenue (NBR), the customs valuation of imports in these seven categories stood at Tk 4.05 billion (405 crore) between 1 July of the current 2025–26 fiscal year and last Wednesday. Against this, the government collected approximately Tk 6.42 billion (642 crore) in revenue.

For lipstick, the minimum customs valuation has been reduced from USD 40 per kilogramme to USD 30 per kilogramme. This could lower duties and taxes by around Tk 2,000 per kilogramme. Based on current import volumes, government revenue from lipstick imports could decline by about Tk 10 million (1 crore).

The minimum customs valuation for skin cream has been cut from USD 20 to USD 14 per kilogramme. This could reduce duties and taxes by around Tk 1,226 per kilogramme and lower government revenue by approximately Tk 750 million (75 crore).

For moisturising lotion and four types of face wash, the minimum customs valuation has been reduced from USD 10 to USD 7 per kilogramme. This could lower duties and taxes by around Tk 613 per kilogramme and reduce revenue from imports of these products by roughly Tk 500 million (50 crore).

However, even though the minimum customs valuation has been lowered, not all consignments will necessarily be assessed at those rates. Depending on product quality, brand and declared value, customs authorities may apply higher valuations. In such cases, the potential revenue shortfall would be smaller.

Importers initially pay duties and taxes at the import stage, and those costs are subsequently incorporated into retail prices. As a result, lower import costs create an opportunity for lower market prices. However, the extent of the benefit passed on to consumers will depend on how importers, distributors and retailers adjust their pricing.

The government has not extended concessions to all beauty products. While customs valuation has been reduced for lipstick, face wash, skin cream and moisturising lotion, existing rates have been retained for eyebrow cosmetics and several products used in hand and foot care. The higher minimum customs valuations introduced by the outgoing interim government remain unchanged for these items, meaning importers will receive no new benefits.

On the other hand, the minimum customs valuation for products such as lip liner, lip gloss and lip gel has been increased from USD 20 to USD 30 per kilogramme. This is expected to boost government revenue. Budget proposals relating to duties and taxes generally take effect immediately. Accordingly, the new minimum customs valuations come into force today, Thursday, the day the budget is announced.