Food processors issued a seven-day ultimatum for the government to reconsider mid-fiscal year value-added tax (VAT) and supplementary duty (SD) increase on Thursday.
In a press conference organized by the Bangladesh Agro-Processors Association (Bapa) on Thursday, Bangladesh’s renowned agro-processors and groups have issued a seven-day ultimatum for the government to reconsider the recent VAT and tax hike.
Businesses also warned of adverse impacts on consumers, farmers, and businesses if the decision is not reversed.
Pran-RFL Group CEO and executive member of Bapa Ahsan Khan Chowdhury said: “The recent decision by the government will have an adverse impact on products like juice, pickles, and snacks made from locally sourced fruits such as mangoes and pineapples. Higher VAT would reduce affordability, disrupt business volume, and harm farmers by shrinking demand for raw produce.”
“We aim to contribute to government revenue but not at the cost of poor consumers,” he added.
Zahirul Alam, director, Akij Group, said: “Arbitrary tax hikes could hurt small enterprises, farm workers, and low-income consumers, urging collaboration between the government and industry leaders.”
Bapa president Abul Hashem said: “The VAT hike will stifle new investments, shrink sales growth, and lead to unemployment. We need to follow ethical and rational policies to boost revenue without hurting the agro-processing sector.”
Bapa secretary Iqtadul Hoque, in his keynote, said: “VAT at business level, which was earlier 5%, has been increased to 7.5%.”
VAT on machine-made biscuits, cakes, pickles, chutneys, tomato paste, tomato ketchup, tomato sauce, and fruit pulps from mango, pineapple, guava, and banana has been raised from 5.0% to 15%.
The supplementary duty on fruit juices and fruit drinks has been increased from 10% to 15%.
For artificial or flavored drinks and electrolyte drinks (non-carbonated), the supplementary duty, which was previously zero, has now been raised to 15%.
However, on January 9, the National Board of Revenue (NBR) increased VAT and SD on over 100 products and services.
Amid widespread protest, the government had moved away from its earlier decision to impose a 15% VAT on the restaurant sector, opting to restore the earlier rate of 5%.
On the same day, the National Board of Revenue (NBR) issued an order regarding e-book services.
It stated that only e-books local supply and import are exempted among Information Technology Enabled Services (ITES).
This order shall come into effect immediately.
In order to establish a modern and IT-based education system and to make e-book services universal and easily available, the National Board of Revenue, by virtue of the powers conferred by sub-section (3) of section 126 of the Value Added Tax and Supplementary Duty Act, 2012 (Act No. 47 of 2012), has exempted only e-book services (excluding newspapers, magazines, periodicals, and journals) from value added tax at the import and supply stage.
Regarding the restaurant VAT reversal, NBR member Mohammad Belal Hossain Chowdhury said a notice will be issued in this regard soon.
