The decision to raise VAT and taxes on various products has been taken to boost government revenue rather than to meet International Monetary Fund (IMF) conditions, Finance Adviser Dr Salehuddin Ahmed said on Thursday.
Speaking to journalists after a meeting of Advisers Council Committee on Government Purchase at the Secretariat, the adviser said the adjustments were necessary to fill revenue gaps created by significant tax exemptions on certain goods.
Salehuddin Ahmed said that the hike in VAT on 43 items would not affect the prices of essential commodities or burden ordinary citizens.
He said that higher taxes have been imposed on luxury items, such as three-star and higher-rated hotels, while sparing establishments of standard quality. "The objective is to ensure a balanced revenue collection system that does not inconvenience the general population," he said.
The adviser, however, expressed optimism about economic stability in the coming year, adding that banks would receive sufficient support to maintain liquidity. "We aim to allocate increased budgetary resources to education and health, strengthening these vital sectors," he said.
The proposal, which has been sent for presidential approval, will be implemented through an ordinance once authorised.
While the adjustments target luxury goods, concerns persist regarding their potential impact on the broader economy. —UNB
