Restaurant owners call for taxing all other eateries


FE REPORT | Published: March 15, 2021 08:29:01 | Updated: March 23, 2021 16:26:38


File photo used for representational purpose only

Local restaurant owners on Sunday proposed the government to bring all eateries, including street foods vendors, under the tax net by slashing the VAT rate to 5.0 per cent.

Currently, 40 per cent of the restaurants remained out of the VAT net as higher rate of consumption tax scares them away, said Imran Hassan, secretary-general of the Bangladesh Restaurant Owners Samity

For example, consumers of air-conditioned restaurants have to pay 15 per cent VAT while non-air-conditioned ones pay 7.5 per cent.

"The government will be able to collect more than three-fold VAT from restaurant owners if it lowers the VAT rate," Mr Hassan said speaking at a pre-budget meeting at the National Board of Revenue (NBR).

NBR chairman Abu Hena Md Rahmatul Muneem chaired the meeting.

He proposed to impose a uniform VAT rate for both air-conditioned and non-air-conditioned restaurant owners.

"We face difficulties in collecting VAT at 15 per cent from consumers in the restaurants as they are not willing to pay at such a high rate," he added.

Fiscal support is needed for this sector as it was hit hard by the COVID pandemic for six months, especially during the shutdowns, he said.

Zakir Hossain, general secretary of the Bangladesh Super Market Owners Association, said the consumers of organised retail are paying 5.0 per cent VAT on the Maximum Retail Price (MRP) of products, which is unjust.

"We often face questions from different quarters on why consumers have to pay additional amount beyond MRP," he added.

Mr Hossain proposed to resolve the discriminatory fiscal measure on super market consumers as consumers of retail shops are exempted from it.

"The business of super markets has started shrinking after slapping of 5.0 per cent on its consumers," he added.

He said the establishment and operational costs of super market owners are higher than those of general shops.

Responding to the proposal, the NBR chairman said consumers, who are willing to buy products in posh environment, go to the super shops.

He said the super shops have to keep some exclusive products to attract the consumers.

Abu Naser, president of the Bangladesh Outsourcing and Logistic Service Association, proposed to expedite refunding of Advance Income Tax (AIT), review the tax measure on the payment of 0.5 per cent tax, above Tk 30 million turnover, irrespective of profit or loss.

Local paper mill owners sought budget support in checking the illegal import of paper abusing the bonded warehouse facility.

They said the local industries are struggling to survive due to uneven competition.

The association leaders said a vested quarter has taken "suicidal step" to import papers for text books without paying duties and taxes ignoring local mills.

The NBR chairman said consumers have the right to get quality paper.

"How long would the government give protection to the industry?" he questioned.

The NBR gives support to the industry to develop its capacity and withdraw the benefit after a certain time when it found they were empowered, he added.

Three associations from the tourism sector have proposed to reduce tax on outbound remittance, tax benefit for vehicles for carrying tourists and provide them incentives to attract tourists.

The NBR chairman suggested the tour operators contact the relevant ministries supporting their demand for incentives.

The tourism and resort association demanded cutting the VAT rates by 50 per cent for resorts.

Helal Uddin, the Money Changers Association of Bangladesh, proposed to automate the VAT-related documents as they have to give hard copies in Bangladesh after submitting those online in the VAT department.

NBR member Masud Sadik said the work of automation is under process and the problem will be resolved soon.

Dress-makers Association demanded lowering their VAT rate to 4.5 per cent considering the 30 per cent value addition.

He said they are facing uneven competition as imported ready-made dresses are flooded in the market.

Leaders of the Battery Manufacturers Association proposed to increase the import duty rates to protect local manufacturers.

The NBR chairman said they would actively consider the proposals of dress makers and tourism sectors as those are affected by the pandemic.

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