In response to demands from business communities, the National Board of Revenue (NBR) has promised reductions in the recently increased Value Added Tax (VAT) and supplementary duties.
However, as of 21 January noon, the corresponding statutory regulatory order (SRO) has not been issued, resulting in the continued collection of taxes at higher rates.
On 9 January, two ordinances were promulgated - the Value Added Tax and Supplementary Duty (Amendment) Ordinance, 2025, and the Excise and Salt (Amendment) Ordinance, 2025.
Following their issuance, the NBR's VAT department circulated relevant directives, increasing VAT and supplementary duties on 93 products and service sectors.
This adjustment has indirectly and directly raised costs across numerous industries, prompting businesses to appeal for tax relief almost daily. Some have even taken to the streets in protest.
Automobile sector representatives staged a sit-in in front of the NBR on 20 January, withdrawing only after receiving assurances from officials.
Prior to this, stakeholders from the confectionery and hospitality industries had similarly protested, vowing not to leave until their demands were met.
Despite the NBR's declaration of reduced VAT rates for specific sectors, none of these promises have materialised into official notifications.
Consequently, elevated VAT and supplementary duties are still being levied at ports, the Bangladesh Bank, and various other entities.
The tax increases were part of the government's compliance with the International Monetary Fund's (IMF) loan conditions, a move that has sparked widespread unrest among the business community.
Former NBR chairman Md Abdul Majid commented that the amendments have led to higher costs in over a thousand sectors, increasing prices and operational expenses.
Deputy Commissioner of VAT at NBR, Barrister Md Badruzzaman Munshi, confirmed that discussions are ongoing regarding the adjustment of VAT and supplementary duties for certain key sectors.
However, he did not specify which sectors or the extent of the proposed adjustments.
Bangladesh Automobile Workshop Owners' Association President Md Jahangir Alam highlighted that small entrepreneurs who rent spaces for workshops have been disproportionately burdened with the VAT increase.
He argued for a reduction of VAT to 5%.
Interim government had raised VAT and duties on 9 January, increasing the VAT on workshop services from 10% to 15%.
Although the NBR later rescinded the VAT hike in the restaurant sector following protests, other essential items such as medicine and apparel still face increased duties, pending review.
Business associations like the FBCCI and DCCI have urged the government to reconsider the newly imposed VAT, but the SRO to enforce these changes is still awaited.
