Living cost to increase again!
The ongoing high inflation has already left the common man in a state of distress, he is worried about his living expenses. In the meantime, the government has increased the Value Added Tax (VAT) and Supplementary Duty Tax on more than a hundred goods and services. This will increase the cost of living of the people by another point at the beginning of the year.
Last Thursday night, two ordinances were issued regarding the increase in customs duties. The two ordinances are – Value Added Tax and Supplementary Duty (Amendment) Ordinance 2025 and The Excise and Salt (Amendment) Ordinance 2025. In the context of the issuance of these two ordinances, the VAT Department of the National Board of Revenue (NBR) issued instructions in this regard.
The changes in these ordinances have come into effect immediately. Earlier, on January 1, the NBR’s proposal to increase VAT and supplementary duty was passed in the meeting of the advisory council of the interim government. After that, it was issued in the form of an ordinance, subject to the approval of the chief advisor and the President, with the opinion of the Ministry of Law. Since there is no National Parliament, the government has taken this decision to increase customs and taxes through an ordinance.
According to the NBR notification, the supplementary duty on services through the use of mobile phone SIM or RAM card has been increased from 20 percent to 23 percent. As a result, the cost of daily mobile phone calls and internet usage will increase.
Additional costs will have to be calculated for eating at restaurants. Because VAT has been increased from 10 percent to 15 percent on all types of restaurant bills. So far, this rate was 5 percent. This will now cost more if the urban middle class goes to a restaurant with their family and relatives. Besides, the cost of buying sweets during festivals or various occasions may also increase. Because the VAT on sweets shops has been increased from 7.5 percent to 15 percent.
The VAT on clothing outlet bills has been doubled from 7.5 percent to 15 percent. As a result, you will now have to pay more if you buy ready-made clothes from brand shops or markets.
Concerned traders say that the new VAT will be applicable to both brand and non-brand cases. This will increase the price of clothes. This may also affect trade. Because if prices increase, sales may decrease.
The list of imported fruits includes various fruits. These include grapes, apples, mangoes, oranges and pears. There is also fruit juice. In addition, supplementary duties have been increased on several products including cigarettes containing tobacco, paints, liquor bills, potato flakes, plastic and metal spectacle frames, reading glasses, sunglasses, electrical transformers and the oil used in them, CR coils, etc. VAT on all types of tissues has been increased from 7.5 percent to 15 percent. The doubling of VAT may increase the price of tissues.
The VAT rate on tailoring shops and tailors has also been increased from 10 percent to 15 percent. As a result, more money will have to be spent on tailoring shops to make clothes than before.
Meanwhile, the travel expenses of the middle and lower-middle class who are eager to travel are increasing. Because the value added tax or VAT on non-AC hotels has been doubled to 15 percent. It was 7.5 percent so far. That is, the VAT rate has been doubled.
Excise duty has also been increased in the case of air travel. Excise duty on domestic flights has been increased from 500 to 700 taka. Excise duty on travel to SAARC countries has been increased from 500 to 1,000 taka and from 2,000 to 2,500 taka outside SAARC countries (within Asia). In addition, the NBR has increased the excise duty on trips to Europe and America from Tk 3,000 to Tk 4,000.
It is worth noting that this duty is collected from passengers along with the price of the air ticket.
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