Tax Hike Unlikely to Impact Public Life: Finance Advisor
- Update Time : 10:44:47 am, Thursday, 2 January 2025
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The government’s decision to increase VAT (Value Added Tax) on various goods and services will not significantly affect prices, according to Finance Advisor Salehuddin Ahmed. Addressing concerns about the potential impact on the public, he remarked, “I don’t think it will cause hardship.” Speaking at the Secretariat on Thursday, he emphasized that duties on essential goods have been reduced to zero, urging people to consider these exemptions.
This decision follows the interim government’s approval on Wednesday to raise VAT on 43 items and services, alongside plans to increase supplementary and excise duties on certain goods. When asked if this would raise living costs, Salehuddin noted that no country, not even Nepal or Bhutan, has lower taxes than Bangladesh. He assured that taxes on essential goods remain minimal.
Dismissing suggestions that the move was influenced by IMF recommendations, Salehuddin stated it was a carefully considered decision. He added that inflation indicators, such as rice and lentil prices, would not be significantly affected since the tax increases target less impactful items.
Explaining the rationale behind the move, he highlighted the need to manage a significant revenue deficit, saying, “We have offered several thousand crore taka in exemptions, but we can’t rely heavily on deficit financing to move forward.”
