Rising VAT Burden Amid Inflation: Concerns and Implications for Low-Income Earners

• Proposed substantial increase in indirect taxes, such as VAT, for next fiscal year causing concern amid persistent inflation
• Finance ministry and NBR gearing up to boost revenue from VAT and supplementary duties
• NBR aims to collect additional Tk 94 billion in VAT for fiscal year 2024-25
• Finance ministry aims to generate 51% more revenue from VAT and supplementary duties next fiscal year
• Fear that VAT tax hikes will worsen hardship for low and middle-income earners
• NBR has already imposed 15% VAT on metro rail ticket prices, making rides costlier
• Anticipation of VAT concessions and exemptions for local industries being reduced in coming fiscal years
• Bangladesh heavily relies on indirect taxation like VAT for revenue collection
• Indirect tax collection accounted for 66% of total tax revenue in last fiscal year
• Increase in VAT can disproportionately affect lower-income individuals, making it regressive in nature
• Progressive tax system places greater financial responsibility on those with higher incomes for more equitable tax burden distribution.

Source: today.thefinancialexpress.com.bd

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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