In the face of criticism, the National Board of Revenue (NBR) has backed away from its decision to increase VAT in several sectors including medicines, ready-made garments, restaurants, motor vehicle garages and workshops, mobile phones, ISP services. This agency of the government has issued a notification regarding this on Wednesday (January 22).
According to the notification, with the aim of strengthening its own financial base of Bangladesh, on January 9, the government issued the 'Value Added Tax and Supplementary Duties (Amendment) Ordinance 2025' and 'The Excise and Salt Act (Amendment) Ordinance 2025' ordinance. For the same purpose the National Board of Revenue issues certain notifications revising the rates of VAT, Supplementary Duty and Excise Duty on certain goods and services.
Subsequently, considering the requests of various professional organizations, civil society and stakeholders, the National Board of Revenue (ABR) has on Wednesday (January 22) issued four new notifications reducing the existing VAT rates, VAT deduction rates and supplementary duty rates on certain goods and services in the larger public interest.
According to the new decision, the enhanced VAT rate on the pharmaceutical industry has been completely withdrawn and the previous rate of 2.4 percent has been reinstated to facilitate access to medical care for all sections of the population. NBR is of the opinion that withdrawal of VAT on medicines will maintain the continuous development of the pharmaceutical industry and will not increase the price of medicines at the general consumer level.
In relation to mobile phone and ISP services, the organization says, with the aim of continuing the ongoing digitization program of the country and building a modern IT-savvy young generation and increasing online activities, the increased supplementary duty on services provided through the use of mobile phone SIM or RIM cards and the newly imposed supplementary duty on ISP services. Completely withdrawn. Complete withdrawal of increased or newly imposed supplementary duty on mobile phones and ISP services will not increase consumer costs in these two sectors.
At the same time, noting that the additional VAT has been completely withdrawn in all restaurants other than three-star, four-star and five-star hotels in the country, NBR says that due to the complete withdrawal of the additional VAT, the general public will be able to take food from these restaurants at the previous price.
The increased rate of VAT on motor vehicle garage and workshop services has also been completely withdrawn. NBR has also mentioned that the total withdrawal of additional VAT will not increase the price of the related services.
In view of the same, the additional VAT imposed on the marketing of clothing other than own brand clothing has been fully withdrawn. Apart from this, the rate of service VAT has been reduced from 15 per cent to 10 per cent in the case of non-AC hotels, confectionery stores, and marketing of own-brand clothing, NBR said.
It may be noted that in the last few months, the National Board of Revenue has given wide tax concessions in terms of import duty, regulatory duty, VAT, advance income tax and advance tax on edible oil, sugar, potato, egg, onion, rice, dates and pesticides. At the same time, the company has exempted VAT on e-book services at the local supply and import level and on metro rail services. Besides, the excise duty leviable on Haj tickets has been completely withdrawn.
