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Govt acts to stem price spiral

Waives VAT on edible oils, sugar

December 31, 2022 00:00:00

These women - some of them are even holding babies in their arms - scramble to buy daily commodities at a TCB sales point in Lalbagh area of the city on Thursday. With the prices of essentials skyrocketing, the line of low-income people for buying the cooking items at subsidised prices is getting longer every day - FE photo by Shafiqul Alam

The government finally lifts value-added tax (VAT) on a number of essentials, including soaring edible oils and sugar, trying to tame the overheating market.

Also, the government purchase body approves huge imports of essentials while the central bank directs banks to open LCs with minimal or no margin for import of the essential commodities.

In the case of edible oils, twofold value taxes--15 per cent at production level and 5.0 per cent at consumer level-are both waived until June 30.

The tax waiver, coupled with bulk import decision, was approved Thursday with a view to giving "relief to people" from the heat of price hike of these and other daily necessaries.

Amid price hike of edible oils on the global market, domestic prices of the cooking item has also gone spiralling beyond the purchasing capacity of lower-and mid-income groups of people as a section of traders reportedly opted for profiteering.

Per-litter edible oil sold at up to Tk 200. Also, the edible oils became unavailable as unscrupulous businesses created crisis through short supply.

Amid the situation, the government decided on tax relief responding to call from the ministry of commerce and the country's apex trade body - the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

Officials say the National Board of Revenue is to issue notification to this effect soon.

"To keep the prices of essential commodities at tolerable level today we lifted VAT on some items," Finance Minister AHM Mustafa Kamal told newsmen after a virtual meeting of the cabinet committee on public purchase.

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