VAT hike impacts on industries
Staff Reporter :
Business leaders have expressed their concerns over recent government decisions to raise value-added tax (VAT) and gas prices without assessing their impact or consulting stakeholders. These issues were highlighted during a seminar titled Investment Prospects and Challenges, organised by the Economic Reporters Forum (ERF) in Dhaka on Wednesday.
Former FBCCI president and managing director of Ha-Meem Group, AK Azad, criticised the VAT hike and the proposed gas price increase from Tk 30 to Tk 75, warning of their detrimental effects on industry and investment. “How could this happen? Businesspersons are being treated like criminals,” he said, questioning the government’s claims that the price hike would not impact industries.
Abul Kasem Khan, former president of the Dhaka Chamber of Commerce and Industry (DCCI), lambasted policy inconsistencies and the lack of clarity regarding effective tax rates in Bangladesh. “Some say it’s 12 per cent, others 27 per cent, and some even claim it’s 48 per cent.
This level of inconsistency is unparalleled globally,” he remarked, emphasising the need for institutional reforms to curb corruption.
The seminar, held at the ERF office in Purana Paltan, was attended by key figures, including Bangladesh Investment Development Authority (BIDA) Executive Chairman Chowdhury Ashiq Mahmud Bin Harun, FBCCI administrator Hafizur Rahman, and LafargeHolcim Bangladesh CEO Mohammad Iqbal Chowdhury.
Chowdhury Ashiq Mahmud Bin Harun refrained from commenting extensively on the criticisms but noted that he would discuss the VAT issue with the National Board of Revenue (NBR). He outlined BIDA’s initiatives to attract investment, including identifying 19 priority sectors and emphasised the need for a centralised investment authority to streamline processes.
Business leaders, however, urged the government to address inefficiencies such as the 10 per cent gas theft disguised as system loss, arguing that fixing these issues would negate the need for price hikes.
Azad also highlighted that while existing companies are modernising, new investments remain stagnant, a trend that must be reversed to sustain economic growth.
The seminar concluded with a call for greater collaboration between the government and the private sector to ensure policies foster a conducive investment environment.
