Budget 2024-25: Commodities that likely to see price hike 

Finance minister Abul Hassan Mahmood Ali has unveiled the proposed budget for the fiscal year 2024-25. He proposed various adjustments in duties and taxes, leading to potential price hikes for some products. 

Nearly 90 per cent of refrigerators and freezers selling in the markets are produced in Bangladesh. A number of local brands are now producing refrigerators, alongside the foreign companies. 

The finance minister proposed imposition of 7.5 per cent of value added tax (VAT) instead of 5 per cent for the locally manufactured refrigerators. 

Additionally, VAT on locally produced air conditioners has been set at 7.5 per cent. It was proposed to increase duties on foreign compressors and other components used in manufacturing the air conditioners and refrigerators. 

Against such a backdrop, prices of refrigerators and air conditioners are likely to go up.  

In line with previous years, the finance minister has proposed a hike in the supplementary duty on cigarettes, bidis, and other tobacco products at their manufacturing stage. It is likely to drive up retail prices of these products. 

The budget proposed a 10 per cent import duty on various parts for motorcycles with an engine capacity above 250 cc. Besides, the import duty on some related products has been raised from 5 to 15 per cent. Hence, motorcycles with high engine capacity are likely to see a price surge. 

To protect domestic manufacturers, the import duty on foreign water filters has been proposed to be hiked from 10 per cent to 15 per cent. It is expected to raise the cost of the imported water filters. 

The budget has proposed a 10 per cent duty on materials used in the production of LED and energy-saving bulbs. Moreover, VAT on energy-saving bulbs and tubelights has been pulled up from 10 to 15 per cent. Hence, electric bulbs are likely to be pricier in the next fiscal year. 

A 15 per cent VAT and a 5 per cent advance income tax have been proposed for imported fish like mackerel, aligning its tax with that of sardines. In the aftermath, imported fish is likely to become more expensive. 

The transaction tax on carbonated drink and beverage companies has been increased from 0.6 to 3 per cent. At the same time, the supplementary duty on soft drinks has been raised by 5 per cent to 30 per cent. Therefore, these products would become pricier in the next fiscal year. 

VAT on locally produced Mango bar, Mango juice, Pineapple juice, Guava juice and Tamarind juice has surged from 5 per cent to 15 per cent. Besides,  the supplementary duty on ice cream has doubled from 5 per cent to 10 per cent, which will likely result in price increases.

Supplementary duty on mobile phone services is proposed to rise by 5 per cent, which would raise the total tax on these services to over 39 per cent. It will increase the cost of over-the-phone conversations and internet usage. 

The supplementary duty on e-SIMs is also set to rise from Tk 100 to Tk 300. 

Specialized hospitals were enjoying a 1 per cent duty on importing medical devices and equipment. The budget has proposed increasing this rate to 10 per cent for over 200 devices and machinery. It would raise healthcare costs.

The VAT on amusement parks and theme parks is set to double to 15 per cent, likely making travel and entertainment more expensive.

Currently, synthetic lubricating oil is increasingly being used in different automobiles including hybrid cars and other modern machineries. Despite the high price in the international market, customs valuation of this product has become difficult due to non-existence of minimum value. 

To overcome this problem and to rationalise the value in line with the international market price, the finance minister proposed to set the minimum value at $5,000. 

Besides, to align the value of the furnace oil with the international market price, he proposed to fix the minimum value for furnace oil as $ 480 per Metric Ton (MT).

Taxes on bricks have been increased at different levels. It is likely to result in higher prices for the construction material.

Customs duty on some other products, including industrial raw materials, has been increased in the proposed budget. Besides, the zero-duty importation facility has been withdrawn completely. 

In the aftermath, imported switches, sockets, and holders are likely to experience price hike in the local market. 

Standard switch sockets are being manufactured in the country but the local industry is facing unequal competition as the importers very often declare the value of a finished switch/socket at a price much lower than its price in the international market. 

In order to address this situation, the finance minister proposed to increase the minimum value of complete switch, complete socket and their parts. 

The import duty on raw materials used for manufacturing switches, sockets, and holders has been reduced from 5 per cent to 1 per cent. But a 15 per cent VAT has been imposed.