VAT burden on consumers going up

VAT burden on consumers are going to rise as the revenue authority focuses more on increasing the existing rate of VAT on various goods and services to attain increased collection goal for the next fiscal year 2018-19.

Some 60 goods and services such as ranging from garment, commuting by ride sharing services, furniture, fruit juices paper, cosmetics and toiletries see spike in the VAT rates for the fiscal year meaning that consumers will have to pay higher to buy the products the next year.

Under the measures, VAT rate of nearly 10 items including bread, buns and handmade biscuits up to Tk 100 per kilogram has been waived in VAT measures in the budget proposed by Finance Minister AMA Muhith.

By revising the existing truncated VAT rates applied on various services including advance trade VAT (ATV) for both imports and trading stages, the revenue authority reduced the number of truncated VAT rates to five -- are 2, 4.5, 5, 7 and 10 percent  from existing nine apart from 15 percent flat rate of 15 percent.

Most of services that enjoy truncated rates have been increased while VAT rates applied on various products based on fixed value has been increased, according to fiscal proposals for the 2018-19 Fiscal.