The restaurant sector in Bangladesh is experiencing significant growth, with establishments proliferating across the nation, even in remote areas. Despite this boom, the government is reportedly not receiving the expected revenue from this sector due to alleged VAT evasion.

Economists suggest that the government could increase its revenue threefold if the National Board of Revenue (NBR) effectively curbs VAT evasion by restaurant owners. Restaurants have become popular venues for recreation, with families frequenting them regularly. However, many establishments are accused of evading VAT, despite charging hefty prices for their services.

The number of restaurants is on the rise, fueled by changes in people's food habits and preferences, along with investments from young entrepreneurs and international chains. Dhaka is now dubbed as a "city of restaurants," with various dining options available throughout the capital.

Despite the government granting industry status to the sector in 2022, VAT evasion remains a challenge. Numerous restaurants, including well-known ones, have been accused of evading VAT in recent years, leading to fines and scrutiny from authorities.

Efforts to increase VAT collection through measures like Electronic Fiscal Devices (EFD) have faced technical challenges, but officials remain hopeful of their success. However, the NBR has already fallen short of its VAT collection target for the current fiscal year.

The restaurant industry holds significant potential for VAT collection, with economists and the NBR viewing it as a promising sector. The proposed tax on weddings and birthday parties held at restaurants is another initiative aimed at increasing revenue.

While the exact number of restaurants in Bangladesh remains uncertain, recent surveys indicate a substantial growth in the sector. Despite challenges in accurately estimating the total number of establishments, efforts are underway to streamline operations and bring all businesses under regulatory frameworks.