COVID-19 protective kits, masks, gloves to be cheaper in Bangladesh

Prices of health products and protective kits, such as masks, gloves and PPE, to fight COVID-19 are set to drop as the government is waiving VAT in the proposed budget for FY 2020-21.

The government is discouraging individual spending on luxury products amid the outbreak, proposing a rise in duty and taxes on these commodities. 

While unveiling the budget in parliament on Thursday, Finance Minister AHM Mustafa Kamal also proposed rise in duty and taxes on cosmetics, mobile phone services, car registration and imported chicken.

Products that may get costlier:

>> Locally made loaded and unloaded printer circuit board, router: 5 percent VAT proposed.

>> Furniture: rise in VAT at showroom stage to 7.5 percent from 5 percent proposed.    

>> Airconditioned launch services: doubling the VAT to 10 percent proposed.

>> Car and jeep: rise in supplementary duty to 16 percent from 10 percent on registration and related services proposed.

>> Chartered aircraft and helicopter services: rise in supplementary duty to 30 percent from 25 percent proposed.

>> Mobile phone services: rise in supplementary duty to 15 percent from 10 percent.

>> Locally manufactured cosmetics: doubling supplementary duty to 10 percent proposed.

>> Ceramic Sink, basin, etc.: imposition of 10 percent supplementary duty proposed.

>> Cigarette and bidi: rise in prices in three of four cigarette slabs and all bidi products proposed.  

>> Onion: custom duty on onion import proposed.

>> Industrial salt: increase in import duty proposed.

>> Imported chicken: increase in duty on import of cuts and offal of chicken proposed.

>> Imported nails, screws, small machinery parts, etc.: increase in duty and taxes proposed.

>> Furnace oil: withdrawal of duty waiver proposed to discourage construction of oil-based power plants.  

Prices that may increase:

>> Raw materials: Several articles of Value Added Tax and Supplementary Duty Act 2012 were modified due to the coronavirus pandemic. The advance tax on import of raw materials for local industries has been reduced to 4 percent from 5 percent. Consequently, the process of locally made raw materials should drop.

>> COVID-19 test kits, Personal Protective Equipment and medication: VAT has been exempted for the import, production and trade of COVID-19 test kits, PPE and all sorts of masks, infection preventing medicines.

>> Textile industry materials: VAT on polyester, rayon and other synthetic yarn have been cut down to 5 percent from 15 percent. The VAT on synthetic yarn has been fixed at Tk 6 per kg and on all sorts of cotton yarn is proposed Tk 3 per kg as opposed to existing Tk 4.

>> Small and medium-sized enterprises: Concession given on several raw materials used in the production of these goods will cause their prices to drop.

>> Fish, poultry and dairy products: Concessions has been given on imports of soybean oil cakes and soya protein concentrated goods, so their prices may drop.

>> Potato flakes: VAT has been reduced to 5 percent from 15 percentage points on potato flakes, so it may see a drop in prices.

>> Corn powder: Prices on maize starches may drop after VAT on its manufacturing was cut down to 5 percent from 15 percent.

>> Mustard oil: VAT of locally produced mustard oils was exempted.

>> Agricultural machinery: VAT has been exempted for trading of agricultural machinery products like power reaper, power tiller operated seeder, combined harvester, rotary tiller.

>> Solar Battery: VAT exemption was proposed for up to 60 AMP solar battery production for partner organisations of Infrastructure Development Company Ltd (IDCOL).

>> Gold: Withdrawal of 15 percent VAT on the import of gold bar was proposed to discourage illegal import.

>> Compressors: The proposal for expansion of the concessionary benefit on the import of raw materials by the refrigerator and air conditioner compressor manufacturing industry could cause drops in their prices.

>> Detergent: Lowering rate of customs duty of Linear Alkyl Benzene Sulphonic Acid (LABSA), one of the basic raw materials of the detergent industry, was proposed.

>> Steel Industry: Reduced tax rate on import of refractory cement was proposed to promote the steel industry.

>> Plastic and packaging: Tax rate on the import of photographic plates of plastic has been cut down to promote the plastic and packaging industry.

>> Paper: Taxes on the import of washing and cleaning agent for the paper industry has been lowered, so the price of locally produced papers could drop.

>> Electrical signalling equipment: Reduction of taxes on importing of electrical signaling equipment, one of the main components of deep sea fishing, was proposed to encourage the fishing sector and tap the potential of the blue economy.