Dhaka, Jan 02 (V7N) — The financial advisor has assured the public that while VAT on 43 types of products is set to increase, essential goods will remain unaffected. He made the statement during a press briefing after a meeting of the Advisory Council Committee on Government Procurement at the Secretariat on Thursday.

Economic Stabilisation in Focus:

The advisor expressed optimism about the economy, stating that relief is expected in sectors such as banking in the current fiscal year. He added that allocations for education, health, and information technology will not only be protected but also increased in the upcoming budget.

Inflation Concerns:

Despite the advisor’s reassurances, inflation remains a pressing issue. Overall inflation has surpassed 10% over the last five months, with food inflation reaching 14%. November's overall inflation also remained high.

Details of VAT Increase:

The National Board of Revenue (NBR) has proposed higher customs duty and VAT on 43 products to boost revenue. Key changes include:

VAT on sweets and clothing: Increased to 15% from 7.5%.

Domestic and international air travel: Costs will rise due to higher taxes.

Hotels, restaurants, and beverages: Subject to increased VAT.

If approved by the President, these changes could be implemented through an ordinance soon.

IMF Conditions?

When asked whether the VAT hikes are linked to International Monetary Fund (IMF) conditions, the advisor refrained from a direct response but emphasised that the measures aim to stabilise the economy. He noted that banks would receive adequate support and insisted there was no discomfort regarding daily necessities.

This decision comes as the interim government completes five months in office, sparking debates on the potential impact on consumers and the broader economy.

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