The National Board of Revenue (NBR) today (Jan 22) issued four separate notifications canceling the proposed tax increases on mobile bills, restaurant dining, medicine purchases, and broadband internet services.

Besides, planned VAT hikes on non-branded clothing and vehicle repair workshops have been revoked, reinstating the previous tax rates for these sectors after nearly two weeks.

As per the new notifications, VAT on branded clothing, non-AC residential hotel stays, and branded sweets has been lowered to 10% from the previously announced 15%, though still higher than the 7.5% rate that was in effect until January.

In this regard, the interim government has hiked duties for three consumer products and services compared with the rates effective during the Awami League regime, and left the rates of six other goods and services intact. The two-week-old hikes in duties for 90 other goods and services are expected to be retained.

Supplementary duty on mobile bills have been restored to 20% from the previously hiked 23%, a new 10% supplementary duty on broadband use has been dropped, medicine purchase VAT rate rolled back to 2.4%, and restaurant eating bill has been restored to 5%.

Furthermore, VATs on sale of clothes other than those from one’s own brand have been restored to 7.5%, and vehicle repairing workshop VAT restored to 10%.

On 9 January, the government raised VATs and duties for about 100 services and products, sparking calls from citizen groups and businessmen to revoke the move. Concerns that the present double digit consumer inflation would worsen further sparked the calls.

The duties were raised to improve the country’s tax-GDP ratio, thereby fulfilling an IMF condition for unlocking a trance of a $4.7 billion bailout package.

BDST: 1744 HRS, JAN 22, 2025
SMS