In response to widespread protests, the interim government is set to retract its decision to increase value-added tax (VAT) and supplementary duty (SD) on eight key products and services, including mobile talk time, internet, clothing, restaurants, and medicine.
The National Board of Revenue (NBR) issued a formal order in this regard on Wednesday (22 January).
This move has been welcomed by consumers, who are now calling for the reversal of tax hikes across all 100 products and services affected since 9 January.
Additional relief will extend to non-air-conditioned hotels, sweetmeats, and motor garages, among other items.
In a notable development, the NBR has also removed all VAT on e-books at both import and supply stages to promote greater accessibility for readers.
However, the International Monetary Fund (IMF) has expressed its disapproval, warning that the rollback could result in a revenue shortfall of over Tk1,000 crore, potentially jeopardising the government's revenue targets.
The VAT increase on Internet Service Providers (ISPs) is expected to be nullified, maintaining the rate at zero.
Additionally, the VAT on clothing, non-air-conditioned hotels, and sweetmeats will be reduced from 15% to 10%, compared to the previous 7.5%.
In Dhaka, restaurant owners and workers have protested the VAT hikes, forming a human chain to demand their withdrawal.
Earlier, various business lobbies held similar protests, cautioning against stricter actions if their demands were not met.
While sector insiders welcomed the rollback, they urged the government to rescind all recent tax increases due to the country's high inflation, which has averaged over 9% in the past two years.
Meanwhile, business groups such as the Bangladesh Agro-processors Association and Dhaka Chamber of Commerce and Industry have voiced their concerns, calling for a complete withdrawal of the tax hikes.
