Govt to increase VAT on restaurants, hotels, clothing
The truncated VAT rates on 43 types of goods and services will be abolished, and a standard rate of 15% will be applied
Highlights:
- VAT to increase from 5% to 7.5% for restaurants
- 7.5% to 15% for non-AC hotels
- 7.5% to 15% for branded and non-branded clothing items
The National Board of Revenue (NBR) is planning to increase VAT (value-added tax) on restaurants from 5% to 7.5%. Similarly, the VAT rate for non-AC hotels may be doubled from 7.5% to 15%.
In addition, the 7.5% VAT on branded and non-branded clothing items may double to 15%, sources at the NBR told The Business Standard.
The 5% VAT rate for trading may increase to 7.5%. VAT may also increase in the medicine business.
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Furthermore, the supplementary duty rate at the import stage is going to increase for the import of seven products including soap, detergent, paint, and betel nut.
The NBR is also planning to increase the existing excise duty on air tickets. The VAT and supplementary duty on tobacco products will also be raised.
Meanwhile, the truncated VAT rates on 43 types of goods and services will be abolished, and a standard rate of 15% will be applied.
Sources said the NBR might issue an order in this regard by Sunday.
A senior NBR official told The Business Standard that the move is being made to meet the conditions set by the IMF and generate an additional Tk12,000 crore in revenue for the current fiscal year.
