DHAKA: Finance Adviser Dr. Salehuddin Ahmed asserted today that the recent increase in value-added tax (VAT) on 43 goods and services is not expected to significantly impact overall inflation or the prices of essential goods. He emphasized that the VAT adjustments are strategically aimed at luxury items, rather than essentials, to avoid burdening the average consumer.
According to Bangladesh Sangbad Sangstha, Dr. Ahmed made these remarks following a meeting of the Advisers Council Committee on Government Purchase (ACCGP) at the Bangladesh Secretariat. The council approved amendments to the Value Added Tax (VAT) and Supplementary Duty Act, resulting in increased VAT on selected goods and services, as well as the introduction of VAT on certain items.
Dr. Ahmed addressed concerns about potential price increases due to the VAT hike, assuring that essential commodities such as rice and pulses, which significantly influence inflation, will not be affected. He noted that duties on these items have been reduced to zero, providing relief to consumers.
He explained that the increased taxes would primarily target luxury items, such as accommodations in three-star and higher-rated hotels, leaving standard establishments unaffected. "The objective is to ensure a balanced revenue collection system that does not inconvenience the general population," Dr. Ahmed stated.
Furthermore, the finance adviser pointed out that Bangladesh's tax rates remain relatively low compared to neighboring countries like Nepal and Bhutan, underscoring the country's commitment to maintaining affordable living standards for its citizens.