BM Desk : The government has provided tax benefits to local manufacturers of medicines, two-wheelers, and three-wheelers, as well as to producers of electrical and electronic goods for FY26.

The VAT exemption on active pharmaceutical ingredients (APIs) production has been extended until June 30, 2030, which will positively affect the operations of Beximco Pharmaceuticals, Square Pharmaceuticals, and Renata.

Enhancing local capacity for API production will decrease reliance on imports (primarily from India and China), which will lower production costs, improve the availability of medicines, and boost the export potential of Bangladesh’s expanding pharmaceutical sector.

In the proposed FY26 budget, the government suggested eliminating all VATs exceeding 5.0 percent on local e-bike production until June 30, 2030.

This fiscal measure aims to strengthen the domestic e-bike manufacturing industry by reducing production expenses and promoting environmentally friendly transportation options.

Listed companies Walton Hi-Tech Industries and Runner Automobiles will benefit from the reduced tax rate, as both firms manufacture, assemble, and market e-bikes in Bangladesh.

Additionally, the government has opted to exempt companies from supplementary duties on imports of specific essential raw materials needed for the production of refrigerators, freezers, air conditioners, and their compressors until June 30, 2028.

This initiative will assist Walton and Singer Bangladesh Limited in expanding their operations and achieving greater profitability.

The suggested decrease in import duties on essential raw materials for tyre production, along with a reduction in duties on the import of buses (16-40 seats) and microbuses (10-15 seats), will benefit Runner Automobiles and IFAD Autos. The lowered import duties will reduce vehicle assembly costs, potentially boosting market share. Additionally, reduced duties may improve profitability.

Furthermore, the withholding tax rate on oil supplied by companies engaged in oil refining has been lowered from 2 percent to 1.5 percent. This change will benefit Jamuna Oil Company, Padma Oil Company, Meghna Petroleum, MJL Bangladesh, and Eastern Lubricants Blenders.

The supplementary duty on all varieties of ice cream has been cut to 5.0 percent from 10 percent, which could enhance the profitability of Taufika Foods and Lovello Ice-cream.

Lastly, the current VAT exemption for the import of raw materials used in sanitary napkins and diapers, essential for the health protection of women and children, has been extended until June 30, 2030. ACI Limited is expected to experience a positive effect from this initiative.