Increasing VAT, Tax And Move To Hike Gas Price Suicidal: DCCI

The Dhaka Chamber of Commerce and Industry (DCCI) President Taskeen Ahmed said that the increase of VAT, Tax, and the move to hike gas price will be suicidal for the economy.

"Amidst geopolitical turmoil and the current challenges of the international and local economies, increasing VAT on more than hundred products, increasing tax on few industries and the initiative of increasing price of gas more than twice in the industry is a catastrophic decision for our business, trade, and investment as well as for the overall economy," said Taskeen Ahmed at a press conference its office on 11 January. 

Prof. Dr. Yunus-led interim government raised the value added tax (VAT) and supplementary duty (SD) on more than 90 products and services, including fruits, beverages, mobile talk time and internet.

The hikes came into effect from Thursday, after the government issued a gazette notification amid persistent inflation which have already putting pressure on low-income and middle-class people. At the same time, the government is reportedly planning to raise gas price at industrial level.

DCCI President also said the country's private sector is already facing many challenges due to global geopolitical instability, its impact on the international and local economy, foreign exchange reserves, rising import cost, high energy cost, high inflation, high interest rates, high tariff rate, increasing VAT rates and above all, deteriorating law and order situation. 

He said this year the Dhaka Chamber will focus more on reducing interest rates, controlling inflation and keeping the foreign exchange rate stable.

Taskeen Ahmed cited that the CMSME sector is solely the largest sector in Bangladesh that creates the most employment generation than any other sector. 

About the reform initiatives taken by the interim government, he expressed the expectation of the private sector that the government will complete the reform activities as per their set target soon. He said that the flow of low-cost finance to the CMSME sector is needed to be expedited more. 

He later said that completing hundred economic zones by the year 2030 with all facilities is not an easy task. Rather, if the government is able to ensure all required infrastructure and other facilities in the five economic zones, then domestic and foreign investors will be more optimistic and there will be a possibility of expanding investment activities. 

Regarding the continuation of the policy, Taskeen Ahmed said entrepreneurs are encouraged to invest subject to obtaining a long-term supportive tax structure, in which case the sudden decision to increase tax or duties in the mid-way will have a negative impact on the entrepreneurs, which is not desirable at all, as a result of which local investment as well as foreign investment may be hindered, which may not bring any good for the economy, he replied to another question of a journalist.

At the same time, he also urged the government not to take unnecessary projects and enhancing strong monitoring on implementation of ADP so that the projects end on time.

DCCI Senior Vice President Razeev H Chowdhury and Vice President Md. Salem Sulaiman and members of the board of directors were also present on the occasion.