VAT on the burden of high prices.
Inflation in the country, especially food inflation, is now at an extreme level. According to the latest estimates of the Bangladesh Bureau of Statistics (BBS), food inflation has decreased slightly in the last month of December 2024, but it has stood at 12.92 percent. That is, in a year’s time, about 113 taka is now being spent on food products worth 100 taka.
The government has suddenly increased VAT and duties on more than a hundred goods and services in the middle of the fiscal year. As a result, the cost of these goods and services is going to increase. Although it is being said that the increase in VAT will not affect the price of goods. However, experts say that the burden of the increase in VAT will have to be borne by the consumer in the midst of high inflation.
Two ordinances were issued last Thursday regarding the increase in duties and taxes. In the context of the issuance of the ordinance, the VAT Department of the National Board of Revenue (NBR) has issued some instructions in this regard. As a result, the changes in this ordinance 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. Then, after taking the opinion of the Law Ministry and subject to the approval of the Chief Advisor and the President, it was issued in the form of an ordinance. Since the National Parliament is not in session, the government has taken this decision to increase customs and taxes through an ordinance.
Among the products and services on which Value Added Tax (VAT) and supplementary duty have been increased to increase revenue under pressure from the IMF are imported fruits like apples, oranges, grapes, and pears. This may exclude these fruits from the plates of the lower and middle class during the upcoming Ramadan. Along with this, the price of food will also have to be charged more due to the increase in VAT on restaurant food bills. Not only that, but the increase in VAT in sweet shops will also mean that you will have to pay extra money to buy and eat sweets.
The supplementary duty on almost all types of fruits, except dates, has been increased to 30 percent. It was 20 percent earlier. Not only that, the import of fruit juice has been increased by 5 percent to 15 percent. Fruit importers say that there is already a pressure of duty on fruit imports. Now, with the increase in duty, prices will increase further. Earlier, everyone could have more or less fruit in their food list during Ramadan even if it cost a little. Now, due to the effect of the increased duty, the price of fruit will be higher during the upcoming Ramadan.
Speaking to our news, Sirajul Islam, President of the Bangladesh Fresh Fruits Importers Association, told us that until now, where a kilogram of apples had to pay a duty of 95 taka, now it will have to pay 115 taka. Where the duty in Malta used to be 88 taka, it will now be 113-114 taka. The duty on red grapes has increased from 100 taka per kilogram to 150 taka. As a result, their prices in the market will also increase and business will also decrease. Importers will be forced to reduce imports. This will also reduce employment in this sector.
Sirajul Islam said, nowhere is such a high rate of duty imposed on fruits. Fruits like apples and oranges are now becoming food only for the rich. Let alone the lower class, the middle class will now have difficulty buying and eating these fruits.
During the month of Ramadan, restaurants also organize special dishes. Customers who can afford these dishes are also more interested in them. But as a result of the VAT increase, those who want to indulge in delicious food from restaurants during the upcoming Ramadan will have to pay more than before. Because VAT has been increased from 10 percent to 15 percent on all types of restaurant bills. Until now, this rate was only 5 percent. Now, if you have Iftar or Sehri at a restaurant with your family, you will have to pay more.
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