Govt to propose zero VAT and tax on imported fertilisers, pesticides

Finance Minister Amir Khosru Mahmud Chowdhury will propose in the FY2026-27 budget a complete exemption of value-added tax (VAT) and advance tax at the import stage for all fertilisers and pesticides used in agriculture.

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He will also propose fully exempting the 5 percent VAT applicable at the business stage on all fertilisers, and the 5 percent advance tax on all pesticides at the import stage.

To boost domestic pesticide production, he will propose reducing VAT on 36 raw materials listed in the relevant tax incentive notification to zero percent.

To promote local zinc sulphate fertiliser production, he will propose reducing import duty on zinc ash — used in its production — to 5 percent.

For veterinary medicines, instead of brand-specific benefits, he will propose zero percent concessional treatment for imports under generic categories.

To protect domestic cashew production, he will propose raising import duties on unprocessed and processed cashew nuts. Unprocessed cashew nut imports will face a 5 percent duty, while processed cashew nut imports will face a 25 percent duty.

To shield the fish processing industry, Khosru will propose a 20 percent supplementary duty on imported pangasius fish fillets.

To support poultry, dairy, and fish feed manufacturers, he will propose adding three raw materials to the relevant concessional duty notification at zero percent, along with certain inputs used by domestic producers of poultry and dairy machinery.

He will also propose adding belt-type manure removal machines, hatcher machines, setter machines, humidity sensors, and temperature sensors to the concessional facility list at zero percent import duty.