Garments, a basic human necessity, are set to become more expensive in the local market as the government moves forward with raising the value-added tax (VAT) on clothing.

The increase, aimed at bolstering national revenue, will affect the cost of garments across the country, further burdening consumers’ household budgets.

The VAT on garments has been increased from 7.5 per cent to 15 per cent, driving up the cost of clothing for local consumers.

This change could have a significant impact on purchasing behaviour, especially in the context of rising inflation.

Under the previous tax structure, a garment priced at Tk 1000 incurred a VAT of Tk 75, bringing the total price to Tk 1075.

However, with the increased VAT rate of 15 per cent, the same garment will face a VAT of Tk 150, resulting in a new total price of Tk 1150.

This means consumers will need to pay an additional Tk 75 for the same item.

For many local consumers, this price increase would add further pressure to already strained household budgets, especially among lower and middle-income groups, businesses said.

In the midst of the financial year 2024-25, the government raised VAT and supplementary duties on over 100 products and services.

On Thursday, two ordinances were issued to formalise the tax hike.

These ordinances, the Value Added Tax and Supplementary Duty (Amendment) Ordinance 2025 and the Excise and Salt (Amendment) Ordinance 2025, were followed by a notification from the National Board of Revenue (NBR), making the changes effective immediately.