BCTIA warns higher tariffs on cosmetics to boost smuggling, job losses

The Bangladesh Cosmetics and Toiletries Importers Association (BCTIA) has warned that the proposed sharp increase in the minimum tariff valuation on imported cosmetics in the 2025–26 national budget may result in increased capital flight, a surge in counterfeit and substandard products and the potential loss of over 2.5 million livelihoods across the country.

The association, during a human chain protest held yesterday (30 June) in front of the National Press Club in Dhaka, urged the government to immediately withdraw what they termed an "irrational and discriminatory" tariff policy and replace it with a more realistic and tolerable valuation structure.

BCTIA President Mohammad Zaherul Haque Bhuiyan said, "The proposed tariff valuation is several times higher than international market prices, which will effectively block legal import channels and deprive the government of significant revenue."

He added that the unrealistic valuations would lead to widespread over-invoicing and foreign currency smuggling, undermining the country's fragile forex reserves.

"It is concerning that while the import duty on luxury cars like Rolls-Royce is 89.32%, essential personal care products such as facewash, lipsticks, and creams face tax rates of up to 184%," Bhuiyan said.

General Secretary Mohammad Shahid Hossain said the tariff hike contradicts the government's "Bangladesh 2.0" development agenda and the chief adviser's stated goals of supporting entrepreneurship and employment.

He cited market examples to underscore the disparity.

"A 200ml XPEL Tea Tree Facewash sells for only $1.22 [retail] and $0.61 [wholesale] on UK-based pakcosmetics.com, while a 500ml XBC Cocoa Butter Cream is priced at $1.37 retail and $0.685 wholesale on Poundland. The per-kilogramme value of these products is far lower than the new valuation set by the National Board of Revenue," Shahid said.

Despite this, the new budget has raised the minimum valuation on many cosmetic items by up to 150%, which, he noted, is "a direct blow to an industry that supports over 2.5 million workers and entrepreneurs."

He further warned that the move would incentivise misdeclaration, encourage smuggling, and increase tax evasion, potentially destabilising an already fragile economy.

"Border Guard Bangladesh recently seized Tk70 million worth of smuggled cosmetics in Sylhet that had been affected by the new duty hike — validating our concerns," he added.

Leaders and members of the cosmetics import and trading community from around the country participated in the demonstration.