Muhammad Ayub Ali :
The National Board of Revenue (NBR) is reversing its decision to impose value-added tax (VAT) and supplementary duty hikes on restaurants, medicines, and internet service providers (ISPs), sweets and clothes which were introduced on 9 January.
The interim government has faced widespread criticism from business people stakeholders and mass people after increasing value-added tax (VAT) and supplementary duty on more than 90 products.
As per the latest decision, the NBR reduced the SD on mobile phone usage to the previous rate of 20 percent from 23 percent, and the SD rate on broadband internet to 5 percent from 10 percent, effective from January 9 of this year.
Regarding the trade VAT on medicine, it is likely to be restored to the previous rate of 2.4 percent from 3 percent.
The VAT rate on restaurants is expected to return to the previous 5 percent from 15 percent, said MD Bodruzzaman Munshi, Deputy Commissioner, in a media briefing at the NBR on Thursday.
“An order in this regard issue very soon,” he said. Imran Hasan, general secretary of the Restaurant Owners Association told The New Nation, “Our demand is to reduce VAT to 3 percent so that we will provide cent percent VAT from the Restaurant sector.”
According to a survey of the Bangladesh Bureau of Statistics in 2021, there are a total of 436,274 hotels and restaurants in the country. If VAT is increased than we have to stop our business, added Imran Hasan.
Only 3 to 5-star hotels will remain under the 15 percent VAT rate as they claim the input tax credit, he added.
VAT on own-brand clothing outlets is increased from 7.5 to 15 percent which is now 10 percent Meanwhile, it has been decided to reduce the VAT rate of sweet shops to 10 percent in addition to clothes. VAT on sweet shops was increased from 7.5 percent to 15 percent.
Apart from this, the VAT rate on non-AC hotels has been reduced from 15 to 10 percent which was earlier 7.5 percent.
However, the reverse decision of NBR not only good for business stakeholders but also impactful for mass people said, Ghulam Rahman, former President of the Consumers Association of Bangladesh (CAB).
People may get some relief from the stress of the inflation, he added.