Agro processors in Bangladesh demanded immediate VAT hike review and issued a seven-day ultimatum to the government to reconsider the recent VAT and tax hike.
They said VAT hike would make adverse impacts on consumers, farmers, and businesses if the decision is not reversed.
The demand was placed at a press conference held at a city club to protest the government's decision to raise VAT, taxes, and gas prices, organised by the Bangladesh Agro-Processors Association (BAPA).
The National Board of Revenue (NBR) increases the Value Added Tax (VAT) and Supplementary Duty (SD) on over a hundred products and services, on January 9.
VAT on machine-made biscuits, cakes, pickles, chutneys, tomato paste, tomato ketchup, tomato sauce, and fruit pulps from mango, pineapple, guava, and banana has been raised from 5.0 per cent to 15 per cent. The supplementary duty on fruit juices and fruit drinks has been increased from 10 per cent to 15 per cent.
For artificial or flavored drinks and electrolyte drinks (non-carbonated), the supplementary duty, which was previously zero, has now been raised to 15 per cent. The VAT at the business level, which was earlier 5.0 per cent, has been increased to 7.5 per cent.
Pran Group CEO and executive member of BAPA Ahsan Khan Chowdhury says the recent decision of the government will have an adverse impact on products like juices, pickles, and snacks made from locally sourced fruits such as mangoes and pineapples.
He cautions that rising VAT would reduce consumer affordability, disrupt business volume, and harm farmers by shrinking demand for raw produce.
"We aim to contribute to government revenue but not at the cost of poor consumers," he said.
SMC Enterses Managing Director Saif Uddin Nasim points out that with food inflation at 13.8 per cent and the dollar rate at Tk 120, imposing additional VAT and Supplementary Duty (SD) will escalate economic pressures.
He urges reinstating previous tax rates, emphasising that essential items like electrolyte drinks should not be taxed as luxury goods.
Akij Director Zahirul Alam has critcised the policy, questioning whether it serves citizens' interests or external pressures like the IMF.
He says that arbitrary tax hikes could hurt small enterprises, farm workers, and low-income consumers, urging collaboration between the government and industry leaders.
BAPA President Abul Hashem warns that the VAT hike will stifle new investments, shrink sales growth, and lead to unemployment.
He calls for ethical and rational policies to boost revenue without hurting the agro-processing sector.
BAPA Secretary Iqtadul Hoque presented the keynote while president of ACI Agro Business Division Dr FH Ansarey depicts the processor's role in reducing post-harvest losses and creating affordable processed foods, urging the government to protect this vital industry.
Failure to address these concerns might lead to street protests and an economic downturn, say BAPA leaders.
