Dhaka, Mar 14 (PTI) Bangladesh’s Cabinet on Monday asked the revenue authorities to minimise “as much as possible” the value added tax (VAT) on imported essentials amid their skyrocketing prices, largely triggered by the Russia-Ukraine war.
“The Cabinet meeting with Prime Minister Sheikh Hasina has asked the National Revenue Board to reduce as much as possible the existing 15 per cent VAT on imported essentials,” a government spokesman told reporters following a routine weekly meeting of ministers.
Cabinet Secretary Khandker Anwarul Islam asked the NBR to keep prices within tolerable limit especially of commodities like edible oil and sugar and asked the revenue authority to execute the directive with immediate effect.
He said the government also decided to form a task force in the next couple of days so that unscrupulous traders could not take any undue advantage in view of the global crisis, impacting the supply chains. He added that the Prime Minister “has given strong instructions in this regard”.
Bangladesh, however, by now has waived the VAT on edible oil, chickpeas, sugar and lentils at retailers’ level.
The directive came a day after an inter-ministerial meeting took a series of decisions as queues of trucks carrying essentials for public sale at reduced prices under a special government arrangement were getting longer everyday, drawing concerns and criticisms.
Economists said the COVID-19 pandemic affected the low-income people since early 2020, but the situation has now worsened by an unabated rise in the prices of essentials, including of rice, the staple food of Bangladeshis.
Bangladesh imports edible oil, food, sugar, intermediate goods and raw materials for production but market analysts said using the excuse of the ongoing Russia-Ukraine war, prices of these items, particularly of edible oil, have skyrocketed.
Bangladesh is also dependent on imported petroleum oils and prices for Brent crude oils have increased by 83.9 per cent over the last 12 months amid enhanced demands for fuels as countries have been striving to recover from the pandemic slowdown.
Financial think-tank Centre for Policy Dialogue’s (CPD) executive director Fahmida Khatun suggested advance purchases to reduce the pressure of high prices saying “high payment for expensive fuel will be a stress on the country, given the shrinking fiscal space”. PTI AR PMS PMS PMS
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