VAT increase and its impact

The interim government has decided to impose 15 per cent VAT on 43 types of products and services. The National Board of Revenue (NBR) is expected to issue an order following a vetting from the law ministry.

A large number of people in Dhaka eat food from restaurants due to various reasons. According to reports, 15 per cent VAT would be applicable to the bill. Moreover, the bill for food at air-conditioned restaurants will include 15 per cent VAT, instead of the existing 5 per cent.

Purchase of readymade garment items will also get costlier as VAT on these products will go up to 15 per cent from 7.5 per cent.

It is understandable that the government surely needs to increase its revenue collection. However, the lives of middle and lower-class families have become very difficult due to previous crises. The decision will surely worsen the situation.

Couldn't the government find other ways to increase the revenue collection?

We see reports of tax dodging by elite classes in huge numbers. Do we see any steps to recover the revenues lost to tax-dodging? But we are not seeing enough steps in this regard.

More importantly, we witness that an official order can easily increase prices of products but the same is not true in the case of decreasing prices.

The interim government has taken charge of the country as a symbol of hope. We hope it will remain in that position through its steps in the coming days.

Mithun Hannan

Mohammadpur,

Dhaka

[email protected]