The National Board of Revenue (NBR) has decided to reduce the value added tax (VAT) levied on restaurant food bills from 15 percent to the previous 5 percent. This Thursday, the second secretary of the NBR's policy department, Barrister Md. Badruzzaman Munshi gave this information.
Badruzzaman told Ajker newspaper, '15 percent VAT was imposed on restaurant services by amending the Value Added Tax and Customs Act. However, the government has taken the initiative to reconsider the decision and bring it down to 5 percent again. It is expected that the new rate will be implemented by issuing the SRO today or Sunday.
He also said that apart from restaurant services, VAT reduction on some important products and services is under consideration. However, no final decision has been made about them yet.
In the ordinance issued on January 9, duties and VAT were increased on more than a hundred products and services. Restaurants were also on that list. The Bangladesh Restaurant Owners Association has demanded that the increase in VAT will put pressure on the common people and the restaurant industry.
The association has already formed a human chain to protest against the increase in VAT on restaurant services. The association has written to the NBR chairman demanding reconsideration of the decision to increase VAT.
According to Bangladesh Restaurant Owners Association, there are about 550,000 restaurants across the country. This sector has developed tremendously in the last decade. Among the urban middle class and the youth, restaurant consumption has increased.
In the financial year 2020-21, the restaurant sector collected VAT of Tk 191 crore. Now every year NBR receives Tk 200-250 crore VAT from this sector. NBR expects the collection to increase further if the new VAT rate comes into effect.
