Dhaka: The government has announced a reduction in the Value Added Tax (VAT) on Liquified Petroleum Gas (LPG), aiming to stabilize the market and ensure the affordability of this essential fuel for consumers.
According to United News of Bangladesh, the National Board of Revenue (NBR) issued two notifications on February 16, which will remain effective until June 30, 2026. These notifications outline a revision in the existing VAT structure on LPG. Previously, a 7.5 percent VAT was charged at local production and trading stages, along with a 2 percent advance tax at the import stage. Following an application from the Liquified Petroleum Gas Operators Association of Bangladesh (LOAB) and a recommendation from the Energy and Mineral Resources Division, the government decided to withdraw the 7.5 percent VAT at the local levels and the 2 percent advance tax at the import stage.
The NBR states that a uniform 7.5 percent VAT will now be imposed solely at the import stage. This restructuring implies that while VAT will be collected at the import point, no VAT will be applied to value additions at local production and sales stages post-import. Officials emphasized that this decision was made in the public interest, acknowledging LPG's essential role in both industrial and household contexts.
Authorities anticipate that this measure will contribute to maintaining price stability in the domestic market. The NBR also noted that from the notifications' effective date, the overall VAT burden on LPG consumers is expected to decrease by approximately 20 percent compared to the previous structure. The revised VAT policy will be in place until June 30, 2026, unless further changes are made by the government.