Cigarettes, Alcohol and Construction Materials May Become Costlier Under New Budget

Several products, including cigarettes, alcohol, and construction materials, may see price increases under the proposed national budget for the 2026–27 fiscal year due to higher taxes, duties, and VAT measures.

Finance Minister Amir Khasru Mahmud Chowdhury is scheduled to present the budget in Parliament at 3:00 pm on Thursday (June 11). The proposed budget will be the first under the current government and the 55th national budget in Bangladesh’s history.

According to budget-related information, the proposed budget size is estimated at Tk 938,000 crore, which is Tk 148,000 crore higher than the current fiscal year's allocation. The government aims to collect Tk 695,000 crore in revenue while projecting a budget deficit of Tk 243,000 crore.

Although tax relief is expected on around 60 essential commodities, several other products may become more expensive due to increased taxation.

The housing and construction sector could face higher costs as specific taxes and VAT on MS rods and related products may rise by nearly 10 percent. This could increase overall construction expenses for new homeowners and developers.

Tobacco products are also likely to face stricter taxation. The government may impose a 300 percent supplementary duty on raw materials used in cigarette filters and a 350 percent duty on nicotine. A 40 percent supplementary duty on nicotine pouches is also under consideration. In addition, the price of a 10-stick pack of premium cigarettes could rise from Tk 185 to Tk 210. Authorities are also considering making QR codes mandatory on cigarette packaging.

Alcohol prices may increase as well, with a proposal to impose a specific VAT of Tk 500 per litre on domestically produced alcoholic beverages.

Furthermore, higher VAT rates may be imposed on luxury food items and ten additional imported products. Imported premium frozen fish could face a new 15 percent VAT, while the import duty on cashew nuts may increase from 5 percent to 25 percent to support local producers.

Economists say the measures could help boost government revenue, but they may also increase consumer costs in several sectors of the economy.