Turnover tax on beverage may jump eight times | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Friday
June 13, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
FRIDAY, JUNE 13, 2025
Turnover tax on beverage may jump eight times

Budget

Jasim Uddin & Reyad Hossain
28 May, 2023, 11:55 am
Last modified: 28 May, 2023, 12:21 pm

Related News

  • Budget FY26: A cautious blueprint in an era demanding boldness
  • Turnover tax hike to 1% may hurt CMSMEs: BCI on proposed budget
  • Primary education to see funding cut, madrasah budget to rise
  • A budget meant to fix, not to dream
  • Finance adviser to unveil FY2025-26 budget on 2 June

Turnover tax on beverage may jump eight times

The price of low-tier cigarettes (a pack of 10 sticks) may be hiked by 12.5% from Tk40 to Tk45

Jasim Uddin & Reyad Hossain
28 May, 2023, 11:55 am
Last modified: 28 May, 2023, 12:21 pm

The government is planning to impose a high turnover tax on the carbonated beverages industry to squeeze out more revenue from this sector, according to finance ministry officials.

The existing turnover tax rate is 0.60% for the carbonated beverages industry, which is likely to be fixed at 5% from the next fiscal year, officials said, adding that the advance income tax paid for raw material imports will be counted as the minimum tax.

In addition, the government also plans to realise more revenue from cigarettes through a price increase of about 12.5% and impose another 1% supplementary duty for lower-end cigarettes, said officials.

According to experts and sector leaders, the turnover tax hike may put a burden on small and new companies that are not profitable yet. Besides, new companies may not enter this sector due to such a high turnover tax.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Seeking anonymity, a chief financial officer of a leading beverage company, told The Business Standard (TBS) that big companies are not paying turnover tax as they are making a profit and submitting their returns under corporate tax rates applicable to them.

But the turnover tax hike move may create a scope for the companies to increase products' prices further, he feared.

Pran-RFL Group Director Kamruzzaman Kamal told TBS, "Being one of the large companies in this sector, we are paying regular tax, not a turnover tax."

He also mentioned that most of the large beverage companies are paying regular taxes.

Kamruzzaman urged the government to revise the raw material duty structure as every beverage company is facing challenges due to raw material price hikes stemming from the high dollar exchange rate and energy prices.

According to the Bangladesh Beverage Manufacturers' Association, this sector has an annual turnover of about Tk8,000 crore and some major market players have already invested about Tk10,000 crore. Of them, Akij Food and Beverage invested more than Tk800 crore. 

Coca-Cola franchise International Beverage and Abdul Monem Ltd invested Tk716 crore and Tk290 crore respectively for manufacturing beverages.

Transcom Beverage invested Tk756 crore, Globe Soft Drinks Tk565 crore, AST Beverage Tk384 crore, Pran Beverage Tk485 crore, Partex Beverage Tk229 crore, Sajeeb Corporation Tk140 crore and Meghna Group Tk336 crore.

The country's beverage sector has employed nearly 3.5 lakh people at production and distribution levels.

More revenue from low-end cigarettes

The National Board of Revenue (NBR) is now eyeing tobacco products including cigarettes as an easy way to collect revenue. 

The price of low-tier cigarettes (10 sticks) may be increased by 12.5% to Tk45 from the existing Tk40 and the supplementary duty on this segment, which currently holds about 73% of the entire market share, may also be increased by 1% to 58%. 

Prices may increase for cigarettes in other segments as well. However, existing supplementary duties on these segments may remain unchanged.

Sources at the Ministry of Finance said the NBR aims to collect an additional Tk6,000 crore from tobacco products.

The finance minister may make such a proposal through the Finance Bill while placing the next budget, sources said.

There is pressure from the International Monetary Fund (IMF) to increase the tax-to-GDP (revenue contribution to GDP) ratio, as a condition for the $4.7 billion loan programme. Local anti-tobacco groups have also been demanding an increase in tobacco taxes.

Experts, however, believe that apart from increasing the prices of cigarettes, other steps should be taken to control the use of tobacco products.

Former NBR chairman Muhammad Abdul Majid told The Business Standard, "Increasing the prices of cigarettes will generate revenue for the government. But to reduce tobacco use, non-tariff barriers need to be effectively created in addition to this. Otherwise, the revenue of the government will increase but the consumption of tobacco products will not decrease."

At present, cigarettes in the market are divided into four tiers on which the government fixes prices and a supplementary duty is levied as ad valorem tax. 

The existing price of mid-tier cigarettes (a pack of 10 sticks) may be increased from Tk65 to Tk67, a pack of upper-tier to Tk113 from Tk111 and a pack of premium-segment to Tk150 from Tk142. Supplementary duties existing at these three levels may remain unchanged.

About Tk29,600 crore of value-added tax (VAT) has been collected from tobacco products in the 2021 fiscal year. NBR officials expect it to cross Tlk32,000 crore in the current fiscal. 

As a result of fixing the new prices and bringing changes in the supplementary duty structure, more than Tk38,000 crore can be collected from this sector in the next financial year.

Besides, the supplementary duty on liquid nicotine, transdermal nicotine or similar products which have recently become popular, may increase by 150% and the duty on electronic cigarettes and similar devices and parts may increase by 212%.

British American Tobacco Limited holds a major share of the cigarette market in the country followed by Japan Tobacco International Bangladesh and United Dhaka Tobacco Company Limited.

Economy / Infograph / Top News

BUDGET FY2024 / National Budget / Carbonated beverage / beverage / Turnover tax

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Rescuers work at the scene of a damaged building in the aftermath of Israeli strikes, in Tehran, Iran, June 13, 2025. Majid Asgaripour/WANA (West Asia News Agency) via REUTERS
    Israel hits Iran nuclear facilities, missile factories; Tehran launches 100 drones in retaliation
  • Israeli Prime Minister Benjamin Netanyahu attends a joint press conference with US Secretary of State Marco Rubio at the Prime Minister's office in Jerusalem, February 16, 2025. Photo: Ohad Zwigenberg/Pool via REUTERS/File Photo
    After years of waiting, Israel's Netanyahu finally makes his move on Iran
  • Smart card hitch deprives lakhs in Ctg of TCB products for months
    Smart card hitch deprives lakhs in Ctg of TCB products for months

MOST VIEWED

  • Wreckage of a Boeing 787 Dreamliner showing part of its registration "VT-ANB" in Ahmedabad, India, June 12, 2025. REUTERS/Amit Dave
    Air India Dreamliner crashes into Ahmedabad college hostel, kills over 290
  • File Photo of Chief Adviser Muhammad Yunus: UNB
    Prof Yunus to receive Harmony Award from King Charles today
  • Bangladesh Bank Governor Ahsan H Mansur. TBS Sketch
    Bangladesh mulls settlements with tycoons over offshore wealth: BB governor tells FT
  • Railway seeks Tk2,000cr foreign loans to revive coach assembly, modernise workshops
    Railway seeks Tk2,000cr foreign loans to revive coach assembly, modernise workshops
  • UK Prime Minister Keir Starmer, Chief Adviser Muhammad Yunus
    Disclosure of unconfirmed Yunus-Starmer meeting shows ‘diplomatic imprudence’: Analysts
  • Brother sues Latifur's daughter, widow over alleged forgery to seize control of Transcom
    Brother sues Latifur's daughter, widow over alleged forgery to seize control of Transcom

Related News

  • Budget FY26: A cautious blueprint in an era demanding boldness
  • Turnover tax hike to 1% may hurt CMSMEs: BCI on proposed budget
  • Primary education to see funding cut, madrasah budget to rise
  • A budget meant to fix, not to dream
  • Finance adviser to unveil FY2025-26 budget on 2 June

Features

Among pet birds in the country, lovebirds are the most common, and they are also the most numerous in the haat. Photo: Junayet Rashel

Where feathers meet fortune: How a small pigeon stall became Dhaka’s premiere bird market

1d | Panorama
Illustration: Duniya Jahan/ TBS

Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon

2d | Features
File photo of Eid holidaymakers returning to the capital from their country homes/Rajib Dhar

Dhaka: The city we never want to return to, but always do

4d | Features
Photo collage shows political posters in Bagerhat. Photos: Jannatul Naym Pieal

From Sheikh Dynasty to sibling rivalry: Bagerhat signals a turning tide in local politics

5d | Bangladesh

More Videos from TBS

What did Iran say in response to the Israeli attack?

What did Iran say in response to the Israeli attack?

18m | TBS World
Israel strikes Iran nuclear facilities

Israel strikes Iran nuclear facilities

58m | TBS World
Banks' estimates were wrong: Bangladesh Bank spokesperson

Banks' estimates were wrong: Bangladesh Bank spokesperson

16h | Podcast
What exactly happened to the ill-fated Boeing aircraft?

What exactly happened to the ill-fated Boeing aircraft?

17h | TBS World
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net