The Bangladesh Restaurant Owners’ Association (BROA) criticized the government’s plan to increase Value Added Tax (VAT) amid the current high inflation, stating that it would directly impact the general people.
The leaders of the association issued the warning at a press conference held at a hotel in Dhaka on Thursday.
Speaking at the event, BROA Secretary General Imran Hasan has threatened to go on strike unless the government reconsiders its plan to increase Value Added Tax (VAT) on hotels and restaurants.
Imran suggested that the government could reduce administrative costs and cut unnecessary projects to address budget deficits instead of imposing such a heavy tax burden on businesses.
However, the National Board of Revenue (NBR) has proposed raising VAT on food at hotels and restaurants.
Currently, patrons at regular and air-conditioned (AC) restaurants pay a 5% VAT, which could rise to 7.5%. The VAT for non-AC hotels is proposed to be doubled from 7.5% to 15%.
Imran criticized the government for relying on VAT as a primary revenue source instead of expanding direct taxes.
“Only about 5.25 lakh businesses are VAT-registered, with roughly 3.5 lakh paying VAT regularly. The NBR has not taken effective steps to bring the millions of unregistered businesses under the VAT net, he highlighted.
He explained that currently, according to the decision, the VAT on restaurant businesses is being increased from 5% to 15% and another 10% tax burden called Supplementary Duty (SD) has been imposed on the common people.
“If the increased VAT goes up 15% and SD is increased to 10%, then the common consumer will have to pay a total of 25% tax. In this situation, it will not be possible to collect this 25% additional tax from the consumer in any way,” he informed.
Imran stated that due to high inflation, the business situation is getting worse and if the increased VAT is imposed, it will get worse in the future.
This decision to increase VAT and impose SD at an unreasonable rate on small entrepreneurs and consumers in the restaurant sector is unfair and unreasonable; I strongly demand that the decision to impose this increased VAT and SD be completely withdrawn.
Source: The Daily Sun
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