Al Amin :
The government is considering a significant adjustment in Value-Added Tax (VAT), aiming to raise it to 15 per cent for a range of products. Here’s an overview of the proposed changes:
LED bulbs ranging from 1WATT to 50WATT, currently taxed at 5 per cent, may see an increase to 15 per cent.
Tube lights spanning from 18WATT to 36WATT, currently taxed at 5 per cent, may also face a VAT hike.
Mango juice, tamarind juice, guava juice, pineapple juice, and mango bars, currently taxed at 5 per cent, may also be subjected to the 15 per cent VAT.
In addition to these adjustments, the following revisions are under consideration:
Cigarette rolling papers may witness a VAT increase from 7.5 per cent to 15 per cent.
Amusement and theme park tickets, currently taxed at 7.5 per cent, may be subject to a 15 per cent VAT.
Customers of bidding products may face an increase from 7 per cent to 15 per cent.
VAT for security services and contractor services may be raised from 10 per cent to 15 per cent.
Furthermore, supplementary duties (SD) on carbonated beverages may rise to 45 per cent from the current 25 per cent. Prices of all tiers of cigarettes are also expected to be increased in the upcoming fiscal year.
It’s worth noting that there hasn’t been precedent for such a significant increase in SD across all tiers within a single fiscal year.
Additionally, the proposal includes an increase in VAT from Tk 200 to Tk 300 on each mobile SIM card or e-SIM supply.
Moreover, the National Board of Revenue (NBR) is likely to suggest higher source taxes on income generated by government universities, including profit or interest derived from various deposits.
The proposed increase would raise the source tax from 10 per cent to 20 per cent. Primary schools may also be subject to a 10 per cent source tax on such incomes.
On the flip side, the government is contemplating reducing taxes on income generated by provident, gratuity, and other pension funds. The proposed reduction would lower the tax rate from 15 per cent to 10 per cent.
In an effort to curb high inflation and stabilize markets, the government is considering reducing source taxes on at least 30 essential commodities and food grain supplies. This reduction could see source taxes drop to 1 per cent from the current 2 per cent in the next fiscal year.
The essential commodities targeted for tax reduction include onion, garlic, peas, chickpeas, rice, wheat, potatoes, lentils, edible oil, sugar, ginger, turmeric, dry chilies, maize, flour, salt, pepper, cardamom, cinnamon, cloves, dates, bay leaf, jute, cotton, yarn, and all kinds of fruits. These adjustments aim to make these commodities more affordable for consumers amidst existing price escalations.