Budget FY27: Govt set to offer major tax incentives for semiconductor sector
According to a finance ministry source, the proposed measure includes a long-term preferential import regime for machinery and equipment used in semiconductor and chip-related industries. Under the proposal, such equipment will enjoy a concessional 1% import duty until 30 June 2031.
The government is set to announce a major package of tax and duty incentives for Bangladesh's emerging semiconductor industry in the national budget to be presented in Parliament today (11 June), aiming to attract investment in chip design, testing, and packaging.
According to a finance ministry source, the proposed measure includes a long-term preferential import regime for machinery and equipment used in semiconductor and chip-related industries. Under the proposal, such equipment will enjoy a concessional 1% import duty until 30 June 2031.
In addition, the government plans to exempt these imports from all regulatory duties, supplementary duties, and value-added tax (VAT), creating one of the most generous incentive packages currently available in the country's industrial policy framework.
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Finance ministry officials said the move is part of a broader strategy to build a strong domestic semiconductor ecosystem and position Bangladesh as a competitive destination for high-tech manufacturing and design services.
The incentives will specifically apply to investments in semiconductor or chip design, chip testing facilities, and semiconductor packaging operations.
Machinery, tools, and equipment imported for use in these industries will qualify for preferential treatment, subject to conditions to be specified in a new government notification.
Officials involved in the budget preparation said the validity of the incentives until 2031 is intended to provide policy certainty for investors, as semiconductor projects typically require large capital outlays and long gestation periods.
The government believes the sector has significant potential to create high-skilled jobs, attract foreign direct investment, and support Bangladesh's transition toward a knowledge- and technology-based economy.
Industry stakeholders have long argued that Bangladesh needs a competitive incentive structure to enter the global semiconductor value chain, where countries in Asia are aggressively competing for investment.
The proposed incentives are expected to reduce the initial cost of setting up fabrication-support facilities, design centres, and testing laboratories, making Bangladesh more attractive to both local entrepreneurs and international technology firms.
If approved, the new tax regime will take effect from the next fiscal year and remain in force until June 2031, offering investors a five-year-plus window of policy support for semiconductor-related ventures.
M A Jabbar, president of the Bangladesh Semiconductor Industry Association, told The Business Standard that the semiconductor industry will be one of the key drivers of the global technology economy in the coming decades. Bangladesh already has a growing pool of skilled engineers working in chip design, embedded systems, and related technologies.
"The proposed duty and tax exemptions will help reduce investment barriers and make the country more attractive for both local entrepreneurs and international technology companies," he added.
The Finance Adviser Amir Khosru Mahmud Chowdhury is set to unveil his maiden national budget for FY2026-27 in parliament this afternoon. The proposed budget is expected to have a total outlay of Tk9.38 lakh crore, making it the largest national budget in Bangladesh's history.
