Government proposes Tk 500 VAT per litre on locally produced liquor

The government has proposed imposing a value-added tax (VAT) on domestically produced alcoholic beverages, introducing a fixed levy of Tk 500 per litre on locally manufactured liquor in the upcoming 2026–27 fiscal year.

The proposal was included in the Finance Bill as part of amendments to the third schedule of the VAT Act, according to budget documents.

Under the new provision, liquor produced by Carew & Co (Bangladesh) Ltd. will be subject to the fixed VAT rate, marking a shift from the existing tax structure.

Previously, the state-owned company paid only excise duties to the Department of Narcotics Control, with no VAT applied on its products. With the new measure, VAT will be added alongside existing duties, increasing the overall tax burden on domestically produced alcoholic beverages.

The amendment will take effect after approval of the Finance Bill in parliament.