Construction sector faces crisis, urges tax relief in next budget

Private-sector construction in Bangladesh has slowed significantly due to severe financial losses, affecting industries such as housing, cement, steel, sand, ceramics, and hardware.

Stakeholders have urged the National Board of Revenue (NBR) to take urgent measures to sustain over a hundred businesses directly linked to the sector.

These concerns were raised during a pre-budget discussion for FY 2025-26 at the NBR building in Agargaon on Wednesday.

The Bangladesh Cement Manufacturers Association (BCMEA) and the Bangladesh Steel Manufacturers Association (BSMA) have called for reducing customs duties and taxes to revive the sector.

The customs duty on clinker, the key raw material for cement, was raised from Tk500 to Tk700 per tonne in the last budget, accounting for 15% of the import value.

BCMEA argues this has increased cement prices and slowed construction. They demand a reduction to Tk200.

The steel industry, which imports 100% of its raw materials, has called for the removal of restrictive tariffs and a lower import duty rate of 10% to boost the sector.

Bangladesh’s pharmaceutical industry, which significantly reduces reliance on imported medicines, is facing high duty rates of up to 127.72% on essential life-saving drugs.

The Bangladesh Association of Pharmaceutical Industries (BAPI) has urged the government to lower the 127.72% duty rate on essential medicines, revise the 200%–400% fine for unintentional errors, and exempt certain products from mandatory Bangladesh Trade and Tariff Commission (BNTI) regulations.

BAPI representative Ali Nawaz criticised customs procedures, stating, “Customs atrocities are increasing day by day. We want relief from this.”

The carbonated beverage sector is urging the government to reduce the 3% minimum tax to 0.6%, cut the supplementary duty from 30% to 15%, and exempt mineral water from taxes.

Following a January price hike on cigarettes, manufacturers claim that increased duties have led to lower production and higher smuggling.

They are demanding a Tk5 reduction in the price of low-grade cigarettes and no further tax increases in the upcoming budget.

NBR Chairman Md Abdur Rahman Khan assured stakeholders that their concerns would be reviewed, directing officials to take necessary steps to address legitimate issues.