Reasons behind VAT, SD hikes to be clear soon: Finance adviser
This (VAT hike) will not significantly impact prices. Let them say what they want, he says
Highlights
- Salehuddin says the rationale behind the VAT and SD increase on over 100 items will be revealed soon
- He avoids commenting on whether the VAT decision might be reconsidered
- No updates on disbursing government employees' dearness allowance
- The special OMS programme was suspended in December as market stability improved but may resume if needed
- Despite improvements in rice prices, supply chain inefficiencies persist due to retailers not efficiently sourcing from wholesalers
Finance Adviser Salehuddin Ahmed has assured that the reasons behind the recent increase in value-added tax (VAT) and supplementary duty on over 100 goods and services will be clear soon.
Speaking to reporters after a meeting of the Advisers Council Committee on Government Purchase in Dhaka today (21 January), he said, "This [VAT hike] will not significantly impact prices. Let them say what they want. You'll understand the reasons in a few days."
When asked about the possibility of reconsidering the decision, he refused to comment.
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Regarding the disbursement of dearness allowance for government employees, the adviser said, "I won't say anything about this matter now."
On suspending the special Open Market Sale (OMS) programme, Salehuddin explained, "We launched the special OMS on an urgent basis, which was quite successful. Over 8 lakh people in Dhaka, Narayanganj, and Chattogram benefited from the programme.
"The programme, introduced to address high food inflation in the past two months, offered vegetables like taro stem, eggplant, and gourds at lower prices through the Department of Agricultural Extension. It was suspended in December as the market situation improved," he added.
He hinted that the programme could be reinstated if the situation demands it.
The adviser said, "The supply chain remains broken. Retailers aren't bringing goods efficiently from wholesalers. While it's not a supply shortage, rice prices have decreased somewhat."
