Budget proposes Tk 500 per litre VAT on Carew-made liquor for first time

The new indirect tax layer applies to both local and foreign varieties made by the state distillery

The government has proposed introducing value added tax (VAT) on alcohol produced in Bangladesh by state-owned Carew and Company.

On Thursday, the proposal was placed in the Finance Bill for the 2026–27 financial year, introducing a Tk 500 per litre specific tax through an amendment to the third schedule of the VAT law.

Earlier, only excise duty applied to liquor produced by the state distillery, with no VAT requirement.

It used to pay a fixed excise duty to the Department of Narcotics Control.

With the new VAT inclusion, prices of Carew-produced domestic and foreign branded liquor are expected to increase by Tk 500 per litre.

In Bangladesh, imported and locally supplied goods are generally subject to a 15 percent VAT rate, while higher duties apply at import stage.