Consumers may soon have to pay more for air conditioners and refrigerators, as the government has proposed doubling the value-added tax (VAT) on their production in the 2025–26 fiscal year budget.
The interim government's Finance Adviser, Dr. Salehuddin Ahmed, presented the proposed budget for the fiscal year 2025–26 on Monday afternoon.
He stated that currently, a 7.5% VAT is imposed on production of refrigerators and air conditioners. In the proposed budget, there is a plan to increase this rate to 15% starting from the 2025–26 fiscal year.
According to sources from Ministry of Finance, this will increase the costs for domestic manufacturers, which could significantly raise market prices for these products.
The proposed budget has been set at Tk 7.90 trillion, which is Tk 70 billion less than the current 2024–25 fiscal year’s budget—marking the first time in Bangladesh’s history that size of budget has been reduced.
The revenue collection target for 2025–26 has been set at Tk 4.99 trillion. The budget deficit is expected to be Tk 2.26 trillion, which is 3.62% of the country’s GDP. To cover this deficit, the government will rely on foreign loans, bank borrowing and savings instruments.
This year’s budget prioritizes controlling inflation, creating employment; especially in rural areas, and improving infrastructure. It also emphasizes expanding the scope of social safety net programs.
Since there is no active parliament at present, there will be no formal debate on the budget.
However, the final version of the budget will be shaped based on public opinion.
Ministry of Finance will collect feedback from citizens, analyze them and make necessary revisions to the budget accordingly.
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