Govt scraps plan to impose 15% VAT on ball pen

The government has backtracked from its decision to impose 15 per cent value-added tax (VAT) on the production of ballpoint pens amid opposition from various quarters, including lawmakers.

Instead, it slapped 5 per cent VAT on the writing utensil, according to a notification issued by the National Board of Revenue (NBR). The change came during the passage of the finance act by the parliament on June 25.

Officials said ballpoint pen was exempted from the indirect tax before the NBR sought to levy 15 per cent VAT. Finally, people will have to count 5 per cent VAT to buy ball point pens.

RN Pual, managing director of RFL Group, said prices of pens will increase following imposition of the indirect tax.

"Our cost has increased too for the US dollar price hike. So, we will have to hike prices," he added.

Ballpoint pens are mainly used for writing nowadays and Tk 500 crore worth of pens are sold annually in Bangladesh, Paul said, adding that RFL's share in the market is one-fifth.