Posted on 12 Jun 2025
Steel prices including that of rebar in Bangladesh may rise sharply in fiscal 2025, starting on 1 July 2025, because the government is planning to increase taxes on both imported and locally made steel, according to local media reports.
Kallanish notes that at present, importers pay fixed amounts of tax on key raw materials such as scrap and billets. But the new proposal would replace those with a percentage-based tax of 20-23% on imported raw materials and 20% VAT on local steel production.
In addition, Advance Income Tax (AIT) and other taxes may also rise.
These changes will raise production costs and may mean steel products could become much more expensive for buyers.
This shift could raise consumer-grade rebar prices by around BDT 1,400/tonne ($12/t), industry sources estimate.
Currently, the government collects BDT 3,700/t in fixed taxes on steel raw materials, BDT 1,500/t on imported scrap and BDT 2,200/t on billet and rod production.
A National Board of Revenue (NBR) official however argues the sector is under-taxed.
Steelmakers nevertheless warn the timing could be catastrophic. "With slowing development activity and currency pressure, demand has already dropped 30%," says SK Masadul Alam Masud, president of the Bangladesh Steel Mills Association. “A blanket tax hike would worsen the situation.”
Tapan Sengupta, deputy MD of BSRM, adds that rising input costs would directly hit consumers and slow the struggling construction sector.
Bangladesh’s per capita steel consumption is around 55kg, far below India’s 93.4kg, but is projected to rise to 95kg by 2030.
Between 2018 and 2023, production grew 64%, reaching 9 million tonnes. Industry players fear tax hikes could stall this momentum.
Source:Kallanish
