A contentious provision in Bangladesh’s customs regime—known as the ‘minimum value’ rule—is poised for removal in the upcoming FY 2026 budget, in a move expected to boost competitiveness and ease capital flow for businesses, official sources have confirmed.

The long-criticised measure allowed customs officials to set arbitrary minimum import values, often exceeding actual transaction prices, forcing importers to pay inflated duties. The repeal would allow importers to use transaction-based valuation for duty assessment, aligning with global trade practices.

Finance Adviser Dr Salehuddin Ahmed is expected to announce the measure on 2 June, alongside sweeping reforms.

Among the proposed changes, the customs duty on newsprint may be slashed from 5% to 3%, offering relief to the struggling newspaper industry. Small savers with deposits up to Tk 300,000 will also be exempt from excise duty—currently Tk 120 on Tk 100,000.

Contractors and clearing agents will benefit from relaxed VAT filing requirements, with returns allowed twice annually instead of monthly. Penalties for late submission will be reduced to Tk 4,000 from Tk 60,000.

VAT will be waived on ballpoint pens at the trading stage, while OTT platforms and mobile-tower services will face new 15% VAT, with an additional 10% Supplementary Duty for OTTs.

The budget will also eliminate tariff values and specific duties on imports like clinker, petroleum, and scrap, replacing them with standard customs duties.

To promote green transport, tax benefits are planned for e-bike imports, while tariffs on 100 US products may be waived to counterbalance US trade barriers.

The reforms come as Bangladesh prepares to graduate to middle-income status next year.