Keep essentials out of VAT net, demands consumer rights group

The Consumers Association of Bangladesh or CAB has demanded that essentials, including edible oil, sugar and powder milk be exempted from value added tax under the new VAT law that takes effect in July.

The demand was made at a post-budget press briefing at the Dhaka Reporters Unity on Saturday.

Finance Minister AHM Mustafa Kamal, in his budget proposal presented in parliament on June 13, said that the government will implement the Value Added Tax Act, 2012 from the fiscal 2019-20. 

Under the new VAT law, the government will slap 5 percent, 7.5 percent and 10 percent VAT on specific goods and services apart from the standard VAT rate of 15 percent.

The law was enacted seven years ago but not implemented amid protests by business community several times demanding some reforms.

“We’ll expect that the buyers while purchasing goods would not be affected and all the essentials would be kept out of the VAT net," said CAB President Ghulam Rahman.

The CAB urged the government to ensure that VAT is collected using technology before implementing the new law. “Otherwise, the VAT paid by the consumers will not reach the government, but remain with the traders,” Rahman said.

The group was also critical of the finance minister for proposing rise in import duty on several essentials, including powder milk, oil and sugar.

“We expected him to lower import duty gradually, but he has proposed raising the duty on milk powder, oil, sugar and many other products. We believe this isn’t proper,” Rahman said.