The Government of Bangladesh has reduced value added tax (VAT) on liquefied petroleum gas (LPG) in a move aimed at easing pressure on consumers.
In a decision on 16 February 2026, the National Board of Revenue (NBR) announced that VAT at the production and trading stages of locally produced LPG, previously set at 7.5 percent, has been withdrawn. In addition, the 2 percent advance tax imposed at the import stage has also been removed.
The decision follows an application from the LPG Operators Association of Bangladesh (LOAB) and recommendations from the Ministry of Power, Energy and Mineral Resources.
However, a 7.5 percent VAT will continue to apply at the import stage.
Previously, VAT of 7.5 percent was charged at the local production and business level, alongside a 2 percent advance tax on imports. Under the new measures, once LPG is imported and the 7.5 percent VAT is paid at that stage, no further VAT will be charged at the local production or distribution stages.
The government said the changes are intended to stabilise the LPG market — widely used for cooking and household purposes — and keep prices within consumers’ purchasing power.
Officials estimate that, once the new measures take effect, retail LPG prices could fall by around 20 per cent compared with previous levels.
According to EMRD, only five importers out of 40 suppleied LPG in the local makers that pushed huge crisis of the cooking gas. The government has already taken decision to import LPG in public level overcome the crisis.