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Tax hikes on essential items such as medicines, LPG, and mobile phone SIM cards are implemented immediately after the issuance of two ordinances
Published : 10 Jan 2025, 01:32 AM
Amid high inflation, the interim government has raised taxes, duties, and VAT on over a hundred goods and services, including essential items such as medicines, LPG, and mobile SIM cards. The changes were implemented immediately after the issuance of two ordinances on Thursday.
The National Board of Revenue, or NBR, issued related instructions on the same evening, making the tax and duty hikes effective immediately.
Analysts suggest that the increased value added tax, supplementary, and excise duties on these goods and services, under pressure from the International Monetary Fund, or IMF, may lead to price hikes.
However, Finance Advisor Salehuddin Ahmed and the NBR claimed that consumers would not have to bear additional costs.
The NBR also emphasised through a media statement that the impact on inflation would be minimal.
Despite these assurances, experts analysing the list of affected goods and services indicate that most of these are essential in the current context, potentially fuelling non-food inflation.
The two ordinances, the Value Added Tax and Supplementary Duty (Amendment) Ordinance 2025 and the Excise and Salt (Amendment) Ordinance 2025, were issued late Thursday.
The interim government's Advisory Council approved NBR's proposal to increase VAT and supplementary duties on Jan 1, and the ordinances were issued after receiving opinions from the law ministry and approvals from Chief Advisor Muhammad Yunus and President Mohammed Shahabuddin.
The government had to use ordinances to increase taxes and duties due to the absence of a national parliament.
The IMF, as part of its $4.7 billion loan agreement, required the government to raise an additional Tk 120 billion in revenue for the 2024-25 fiscal year.
This prompted the government to suddenly increase VAT midway through the fiscal year.
