Chief Adviser’s Press Secretary Shafiqul Alam on Sunday said that the interim government has decided to impose VAT to reduce the revenue deficit, not in compliance with the conditions from the International Monetary Fund (IMF).
The press secretary said, "The tax-to-GDP ratio in Bangladesh has been steadily decreasing since the COVID-19 pandemic in 2021. This ratio has fallen to such an extent that in the past five months alone, we have faced a revenue deficit of Tk 42,000 crore. Our target was Tk 1,69,000 crore, but we have managed only a little over Tk 1,26,000 crore."
He further mentioned that the imposition of increased VAT would not significantly impact the common people. The tax revenue will be used for the development of Bangladesh.
He made these remarks during a briefing at the Foreign Service Academy auditorium in Dhaka on Sunday evening. Chief Advisor's Deputy Press Secretary Abul Kalam Azad Majumder, Apurba Jahangir, and Suchismita Tithi were also present at the event.
He also stated, "In terms of the tax-to-GDP ratio, Bangladesh ranks low globally. It has reached a point where it is unsustainable. For Bangladesh's growth, taxes need to be brought to a reasonable level. In this context, VAT has been imposed."
Justifying the VAT imposition, the press secretary added, "VAT had a lot of variation. In some areas, it was 3 per cent, while in others, it was a little higher. We aim to simplify the entire system and bring it to a uniform rate of 15 per cent. Simplification reduces leakages, and reducing leakages is very important."
He further noted, "Since the interim government came to power, we have been trying to reduce expenses."
Translated and edited by Fariha Nowshin Chinika
