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The pharmaceutical sector could benefit from a further series of duty reductions aimed at lowering production costs and strengthening local manufacturing capacity.

The excise duty exemption threshold on bank balances is also proposed to rise to Tk 4 lakh from Tk 3 lakh, offering some relief to small depositors.

PROTECTION FOR LOCAL INDUSTRY CREATES LOSERS

The new budget may seek to provide greater protection for domestic industries through higher duties and other measures on imported products that compete with local manufacturers.

One key proposal is to increase import duty on raw and processed cashew nuts to 25 percent from the current 1 percent and 5 percent, respectively, with the aim of encouraging local cultivation and processing.

Higher protective measures are also expected on imports of ceramic tiles, sanitary ware, wash basins, cotton and rayon fabrics, PVC-coated textile products, curtain fabrics, cosmetics, foam products, honey and betel nuts.

Tobacco consumers are also likely to face a heavier tax burden.

Taxes and duties on cigarettes and other tobacco products are set to increase, pushing up retail prices.

Imported cigarettes and nicotine-related products may face additional levies as part of efforts to discourage tobacco consumption while boosting government revenue. Importers of fossil fuel-powered vehicles could emerge as another affected group.

While the budget is expected to offer extensive incentives for electric vehicles, batteries and charging infrastructure, conventional petrol and diesel vehicles are unlikely to receive similar support, signalling a shift towards cleaner transport.

Towfiqul Islam Khan, additional director (Research) at Centre for Policy Dialogue (CPD), said the budget reflects an attempt to balance several politically important and fiscally demanding priorities at a time when revenue mobilisation remains the government’s biggest constraint.

He said persistent pressure on the operating budget continues to limit fiscal flexibility, while the need to finance electoral commitments further narrows room for discretionary spending.

According to him, although the budget signals an intention to stimulate private investment and provide some relief to consumers, these competing objectives also expose underlying tensions in the government’s fiscal strategy.

Khan added that the real test of the budget would not be the measures announced, but the government’s ability to strengthen tax governance, improve the efficiency of public spending and advance long-delayed reforms in public financial management.