Vat decreased: will price come down?

The National Board of Revenue (NBR) had previously raised the VAT on restaurants from 5 per cent to 15 per cent, only to later return it to 5 per cent. However, despite this reduction, restaurants have not revised their product prices accordingly.

A recent example highlights this issue. A Facebook post revealed that North End Coffee Roasters increased the price of their coffee from Tk 255 to Tk 300 when the VAT was raised. Even after the VAT was reverted to its original rate, the price remains unchanged at Tk 300.

This behaviour reflects a common business practice in our coubtry, where prices tend to rise with market or regulatory changes but rarely fall when those changes are reversed. Such practices unfairly burden consumers and raise questions about transparency and accountability in business operations.

It is crucial for businesses to uphold ethical standards, ensuring that pricing strategies are fair and transparent. Customers deserve to see reductions when circumstances justify them. Coordinated efforts are needed to hold unscrupulous traders accountable, improve the business climate and protect consumers from unjust pricing practices.

Cynthia Majumder

Bachelor of Business Administration

North South University

cynthia.majumder@northsouth.edu