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| Processing of raw materials for medicines at a pharmaceutical factory in Dhaka—a scene of industrial production. |
The Bangladesh Association of Pharmaceutical Industries (BAPI) has welcomed the government's decision to exempt import duty and VAT on raw materials for medicines. BAPI Secretary General SM Shafiuzzaman said the move is very positive for the pharmaceutical sector and will help in the development of the industry.
The National Board of Revenue (NBR) recently reduced the advance tax on import of raw materials for cancer and diabetes drugs from 5% to 2% and waived VAT completely. This initiative will reduce the cost of manufacturing drugs and patients will get medicines at affordable prices.
The NBR announced VAT exemption on import of raw materials for active pharmaceutical ingredients (APIs) and laboratory reagents in 2019, which will be effective until 2025. To avail this benefit, companies have to meet certain criteria, such as producing at least two new molecules per year and ensuring 20% value addition.
The government has given tax holidays to API manufacturers until 2032. To get this benefit, companies will have to spend 1% of their annual turnover on research and development and maintain quality standards.
BAPI believes that this tax and VAT exemption will make the domestic pharmaceutical industry more competitive and increase exports. Currently, the pharmaceutical industry in Bangladesh meets 98% of domestic demand and is also strengthening its position in the international market.
7 June 2025
Author: Kazi Fahsin
Publisher: Novokanth (Novonicle)
