Increasing VAT will raise the cost of a 10-taka biscuit to 13 taka and a 20-taka juice to 25 takas. Due to the increase in duties and VAT, a 5-taka biscuit will cost 7 takas, a 10-taka biscuit will cost 13 takas, a 20-taka juice will cost 25 takas, and a 25-taka juice will cost 33 takas.” This is how Ahsan Khan Chowdhury, Chairman of the Pran-RFL Group, expressed concerns about the potential price hikes to journalists. He stated that although VAT has increased, they have not yet raised the prices of these products. However, he urged the withdrawal of the additional duties and taxes on biscuits and agro-processed products.
Increasing VAT will raise:Â Today, Thursday, after a meeting with the Chairman of the National Board of Revenue (NBR), Abdur Rahman Khan, on agro-processing industries and biscuit manufacturers, Ahsan Khan Chowdhury shared this statement with journalists. During the meeting, the NBR Chairman assured that the issue of reducing VAT would be reconsidered positively. The meeting was held at the NBR building in Agargaon, Dhaka.
On January 9, the value-added tax (VAT) and extra duties were raised on more than a hundred products and services. This modification increased VAT from 5% to 15% on machine-produced cookies, cakes, pickles, chutneys, tomato paste, tomato ketchup and sauces, and fruit pulps such as mango, pineapple, guava, and banana. Additionally, the extra duty on fruit juices and fruit drinks was raised from 10% to 15%. Furthermore, a new 15% supplemental charge was imposed on artificial or flavored beverages, as well as non-carbonated electrolyte drinks.
According to Ahsan Khan Chowdhury, the discussion covered the impact of increasing customs and taxes on consumers and farmers, as well as the economic implications. A comparison was also performed between the VAT rates on comparable products in adjacent countries such as India and Pakistan. Following this, the NBR Chairman stated that a timely decision would be made.
The Chairman of Pran-RFL Group stated, “Do not oppress consumers. Lighten their burden.” He further stated that the NBR Chairman had guaranteed them that the issue would be resolved within the next two weeks.
According to a press statement from the Bangladesh Agro-Processors Association (BAPA), the NBR chairman was advised that if the additional levies and taxes were not dropped, tougher action would be taken.
During the conference, business leaders emphasized that raising VAT is unrealistic in the current situation. They noted that, following the COVID-19 outbreak and the start of the Russia-Ukraine war, businesses are already struggling due to rising inflation, high interest rates on loans, complexity with letters of credit (LCs), dollar market volatility, and recent labor unrest. Furthermore, due to excessive inflation, consumers are already experiencing hardship and have decreased their purchases. As a result, the decision to raise tariffs and taxes has sparked widespread worry among businesses.
According to the industry executives, placing new taxes on processed food goods will disproportionately affect the working class, marginal farmers, and low-income persons. They emphasized that if duties and taxes are raised, it will no longer be possible to manufacture products priced at 5 or 10 taka in the country. They also stated that 80 percent of the products in this sector are priced below 20 taka and are primarily purchased by low-income, middle-class, and working-class consumers.
Mostafa Kamal, Chairman of Meghna Group of Industries; Aziz Al Mahmud, Managing Director of Partex Star Group; M. A. Hashem, President of BAPA; Saif Uddin Nasir, Managing Director of SMC Enterprise; Mohammad Bashir, MD of Rani Food Industries; Syed Zahurul Alam, Director of Akij Foods and Beverages; Parvez Saiful Islam, Chief Operating Officer of Square Food and Beverage; Shahidul Islam, Chief Business Officer of ACI Food and Commodity Brands.
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