Tk 500 Per Litre VAT on Carew Liquor Proposed in New Budget

The government has proposed introducing a value-added tax (VAT) on alcohol produced in Bangladesh by the state-owned Carew and Company. The proposal was formally placed in the Finance Bill for the 2026–27 financial year on Thursday, introducing a specific tax of Tk 500 per litre through a targeted amendment to the third schedule of the VAT law.

Prior to this newly placed budgetary proposal, only excise duty was applied to the liquor produced directly by the state distillery, with no existing VAT requirement for the enterprise. Under that previous framework, Carew and Company used to pay a fixed excise duty directly to the Department of Narcotics Control.

With the new VAT inclusion enacted through the Finance Bill, the prices of Carew-produced domestic and foreign-branded liquor are now expected to increase by an exact flat rate of Tk 500 per litre across the consumer market.

The imposition of this specific flat tax introduces a distinct rate for the state distillery compared to general market commodities. Under the standard tax architecture of Bangladesh, imported and locally supplied goods are generally subject to a baseline 15 percent VAT rate, whereas significantly higher duties are traditionally applied at the initial import stage.