The Bangladesh Restaurant Owners Association had announced nationwide protests, including one in front of the NBR Building
Published : 16 Jan 2025, 11:29 AM
The National Board of Revenue, or NBR, has decided to reverse its recent decision to increase the rate of Value Added Tax, or VAT, and supplementary duties on the restaurants.
The Bangladesh Restaurant Owners Association, or BROA, had announced nationwide protests in the wake of the hike, with a human chain demonstration being held in front of the NBR’s headquarters in Dhaka on Thursday morning.
Amid the announcement, the government decided to reverse the VAT imposed on the sector.
Mohammad Belal Hossain Chowdhury, NBR member (VAT policy), confirmed that the VAT rate in the hotel and restaurant sector would be restored to the previous level of 5 percent. The NBR would issue an order to the effect on Thursday, he said.
The BROA called for nationwide protests on Thursday and some 3,000 restaurant owners and workers in the Dhaka district were to gather for the demonstration in front of the NBR building.
The government decided to reconsider the VAT increase before the programme was held.
Several hundred restaurant owners and workers gathered outside the offices of the tax collection agency for the protest on Thursday. They shouted slogans and held up signs.
Regarding the reversal of the VAT hike, BROA General Secretary Imran Hasan said: “We have yet to receive a gazette. We have been informed verbally.”
“A meeting is being held [at the NBR offices]. We will hear what they have to say after the meeting. Then we will deliver our main statement.”
The NBR's VAT Law and Rules Branch sent a letter to the association's president on Wednesday regarding the decision to reconsider the VAT.
Although the NBR told the association that it would reconsider the VAT hike, the BROA did not withdraw the protest programme.
The NBR's letter to the BROA said that the NBR has seriously reviewed the previous letter sent by the restaurant owners and decided to reconsider the VAT rate in the sector.
It also highlighted that the NBR also seeks the association's cooperation in "increasing revenue, including the scope of VAT and maintaining law and order."
In its protest announcement, the BROA said that the government has suddenly decided to increase the VAT rate in the restaurant sector three times in the middle of the fiscal year. It said the decision to suddenly increase VAT on 43 products and services, including ready-made garments, restaurants, and sweets, amid rampant inflation without any consultation with traders was “irresponsible”.
On Jan 9, the government issued an ordinance increasing VAT and supplementary duties on more than a hundred products and services at the import, production, and supply levels.
Among them, the VAT on restaurants was increased from 5 to 15 percent. In addition, the VAT on confectioneries had been increased from 7.5 percent to 15 percent.
A press conference was organised by the BROA that same day demanding the withdrawal of the decision to increase VAT.