The Finance minister announced the Budget for the 2018-19 fiscal year on the 7th of June. The proposed budget, benefiting mainly the high-end consumers and businessmen, makes bold statements in regards to the proposed level of economic growth, tax slaps on several budding industries, exemptions of corporate taxes for the banking industry and many more. But rigorous economic analyses aside, here’s a rough outline of everything you need to know about what to expect from this year’s budget.
The new budget has slapped a tax of 6 to 7 percent on the production level and 4 to 5 percent on the distribution level for general furniture for households and offices. Expect a price hike. Comfort has its price.
Cigarettes, Bidis and Energy Drinks
In a move to discourage smoking and earn a heftier revenue from the sale of cigarettes and bidis, this year’s budget has proposed an increase of 5 percent supplementary duty of cigarette and bidi papers. The current supplementary duty is 20 percent. The supplementary duty on energy drinks is also set to rise to 35 percent from the existing 25 percent. Prices of tobacco and energy drinks will increase due to the hiked taxes. Next time you’re thinking of going chimney on the street, think again.
Coffee and Green Tea
Newly added 20 percent import tax on the import of coffee and green tea from foreign countries will see a rise in prices of coffee and coffee-based products along with green tea. Students cramming for exams and people looking to have a healthier alternative to regular tea are in for a shock.
Polythene and Plastic Bags
An added 5 percent tax on all plastic and polythene bags will lead to a higher price on these products. Perhaps for the better considering the environmental hazard caused by polythene and plastic. Higher prices on these might lead to the increased use of re-usable environment friendly packets and bags.
Chocolates and sweets
In a rather shocking move, taxes on imported chocolates, candies and honey has been increased by 25 percent, marking a 45 percent import tax on these products. Prices on these imported goods will rise. Bad news for people with sweet teeth.
Perfumes, Body sprays and Aftershaves
Supplementary tax on perfumes, body sprays and aftershaves have increased to 15 percent from 10 percent. The bill on your next appointment at the salon may have gone higher. Too bad if you want to stay odour free.
1 percent tax hike on distribution level of clothes will increase the price of clothes. The budget on your next Eid shopping just got higher.
Taxes on expenditures on small apartments will increase along with the maintenance cost of the apartments.
A 5 percent tax hike on the service charge on the money collected by ride sharing apps like Uber or Pathao might see an increase on the daily fares.
Surcharges will increase on imports of mobile phones and prices will increase as a result. The move is meant to encourage the growth of the local phone assembly industry, but it’ll leave consumers sorely option-less.
Bad news for online shop owners on social media, online portals and consumers. 5 percent VAT will be imposed on all online shopping. It will surely see a rise in the online transaction prices for online shopping.
Tax hikes on used cars will see a rising price when buying reconditioned cars.
Surcharges on Cars and Apartments
According to the new budget outline, if you own two cars or at least own a property of eight thousand square feet in a city corporation area, you are entitled to 10 percent surcharge on the tax you provide.
More price hikes
Along with the ones mentioned, an increase of taxes and surcharges in different rates will see a price hike in the following products/industries:
Fruit juice, Tomato Ketchup, Cosmetics, Hydraulic break fluid, proximity card and tags, bicycle brakes, refined lead etc.
Medicines and medical equipment
A tax reduction in the import of raw materials and medical equipment will result in a price drop in this sector.
Tax reduction in the import of computer parts and software will see a price drop in the industry. Good news for the local IT firms…and crypto-miners.
Existing 15 percent VAT on ballpoint ink is proposed to be removed. This will see a drop in the prices of ballpoint pens.
Local IPS and Electronics Goods
Exemption of taxes at different rates on the import of raw materials will see a drop in prices of locally produced battery charger, IPS, UPS, Lamp holder etc.
Tax reduction on the import of hybrid cars will lead to a price drop when buying hybrid cars in the 1600-1800cc range.
Special tax exemption on School Buses
If schools want to introduce school bus services, Government will impose special tax exemptions on the import of buses. This way, introducing school bus services will be a lot cheaper and government thinks it will help with the traffic situation in Dhaka.
More price drops
Along with the ones mentioned, a reduction of taxes in different rates will see a price drop in the following products/industries:
Refrigerator, air conditioner, fish and pet foods, EDM fluid, raw materials for the publishing industry, non-alloy steel etc.