Photo : Collected

DHAKA, Jan 08, 2026 (BSS) - The Ministry of Power, Energy and Mineral Resources has recommended cutting value-added tax (VAT) on liquefied petroleum gas (LPG) imports to below 10 percent by reinstating a 15 percent VAT exemption at the import stage. 

"To maintain normal supply of LP gas in the market, the advisory council agreed to reinstate the 15 percent VAT exemption at the import stage and imposing VAT below 10 percent and providing exemption from the 7.5 percent VAT imposed at the local production stage at a meeting," said a ministry letter.

The power, energy and mineral resources ministry sent the letter to the National Board of Revenue (NBR) to take necessary measures in this regard.

Recently, the LPG price reached a volatile situation in the country, so the government took initiatives to re-fix VAT and tax at the import and local production levels. At the same time, initiatives were also taken to simplify the process of opening bank loans and LCs (letters of credit) for importing LPG, the letter said. 

The energy ministry requested the NBR to take necessary measures to restructure the tax considering LPG as a 'green fuel' in view of the current situation. 

The letter said that about 98 percent of the total LPG used in the country was imported by the private sector. The demand for LPG increases in the winter season, But LPG supply significantly decreases in the international market as well as locally. 

Earlier, the Advisory Council meeting was held on December 18 and discussed the energy division's issue.

The letter said that the proposal to withdraw the 15 percent VAT exemption at the import stage of LPG and impose 10 percent VAT and to exempt the existing 7.5 percent VAT, VAT and advance tax at the local production stage is timely. 

However, before implementing this decision, it was emphasized that a detailed analysis should be conducted on how much the price of LPG will decrease at the consumer level.

For this reason, the energy division, the commerce ministry and the internal resources division were instructed to conduct a coordinated review. 

However, the LOAB members demanded zero percent VAT on the import stage instead of the proposed 10 percent VAT, the letter said.

Later, the decision, which was taken at the Advisory Council meeting, was presented in a meeting held with the leaders of LPG Operators Association