The interim government has planned to reverse and readjust its proposed decision to add additional value-added tax (VAT) on eight items and services.
Moreover, it is planning to withdraw supplementary duty (SD) on plane tickets to reduce the cost of Hajj flights.
The eight items and services that will have recently–added VAT withdrawn or reduced include medicine, restaurants, non-AC hotels, automobile workshops, mobile phone talk time and internet, internet service providers (ISP), sweetmeat shops, and brand and non-brand clothing.
The authority will issue a Statutory Regulatory Order (SRO) in this regard soon, said the Public Relations Officer of the National Board of Revenue (NBR) Md Al-Amin Shaikh.
Seeking anonymity, an NBR official said the proposal to spare eight items was discussed by the NBR chairman in a recent meeting on January 16.
VAT on medicine
The VAT on medicine at the local retail level was raised by 2.4% to 3%. The NBR has decided to cut the additional VAT.
Earlier, Health Adviser Nurjahan Begum said a recommendation was made to the relevant ministry to reduce the minimal VAT imposed on medicines.
“The issue of medicine VAT was discussed at the outset and we hope the Ministry of Finance will consider this matter,” she added.
VAT on mobile internet, talk time, ISP
The government increased the supplementary duties on SIM card-related services, including talk time and internet, to 23% from 20%.
Now, it has planned to reduce it to 20% again. So, the customers won’t have to bear additional expenses for internet browsing and talk time.
The VAT hike on internet service providers (ISPs) is also expected to be scrapped, keeping the rate at zero.
On January 9 ordinance, it was up at 10%.
Automobile workshop
NBR has backtracked on its decision to impose 15% VAT on automobile workshop services.
The revenue authority took the decision following a meeting between NBR Chairman Md Abdur Rahman Khan and representatives of Bangladesh Automobile Workshop Malik Samity (BAWMS) on Monday.
Restaurants and hotels
The government planned to move away from its earlier decision to impose a 15% VAT on the restaurant sector, opting to restore the earlier rate of 5%.
Mohammad Belal Hossain Chowdhury, a member (VAT Policy) of the NBR, informed the matter on January 16.
The VAT rate on restaurants would be down to the previous 5% from 15%.
Belal said three-star to five-star hotels, however, will remain under the 15% rate as they are able to claim input tax credit.
“We will issue an order in this regard soon,” said the revenue official.
Besides, the NBR has scrapped the import taxes on e-book imports and supplies.
According to sources, VAT on non-air-conditioned hotels will reduced from 15% to 10%. It was 7.5% before.
VAT on clothing, sweets, others
The recently added VAT on readymade garment (RMG) products will be readjusted to 10%. It was increased to 15% from 7.5%.
The NBR also decided to reduce the VAT on sweets to 10% from 15% made on the 9 January ordinance. It was 7.5% before.
SD on plane tickets
On January 9, supplementary duty on overseas trips was increased by Tk200-Tk1,000 depending on the distance. NBR plans to withdraw it to reduce the cost of the Hajj journey.
The NBR On January 9 increased VAT and SD on over 100 products and services.