Withdraw VAT on bread, biscuits: manufacturers

Traders have urged the government to withdraw the recently imposed value-added tax (VAT) on bread and biscuits, saying it will raise the prices of these everyday foods for low-income people.

The previous government had imposed a 5 percent VAT on bread and biscuits, which has now been increased by the interim government to 7.5 percent, they added.

Despite reports from the World Bank and other research findings, the government has maintained the additional VAT on bread and biscuits, which are essential daily foods for the common people, said Shafiqur Rahman Bhuiyan, president of the Bangladesh Auto Biscuit and Bread Manufacturers Association.

"But we haven't reduced the package size or raised the price," he continued. "We expected the government to show goodwill and remove VAT from these essential food items."

He made this comment at a press conference on the "Impact and protest against the additional VAT on poor's essential food – bread and biscuits" at the Dhaka Reporters' Unity in the capital today.

"Due to increased production costs, the packets of bread and biscuits have become much smaller. But how much smaller can these packets get? Soon, we will find that the packet exists, but there will be no biscuits inside," he said.

The government is imposing additional VAT on bread and biscuits—daily food items for labourers, students, and the general public—proving that it is shifting towards more regressive and discriminatory tax policies than the previous government, he added.

This move goes directly against the spirit of the anti-discrimination movement, he said.

"Without any consideration, the government has turned bread and biscuit companies into tools for exploiting the poor. This is extremely distasteful and shameful," he added.

"On the one hand, VAT has been removed from supermarkets, but on the other hand, VAT is being maintained on poor people's food. Why the tax on the food of the poor while the rich get exemptions? This is not only discriminatory but also unethical and an insult to the nation."

Vice President of the Association, Shakhawat Hossain Mamun, said the World Bank report showed Bangladesh is in the 'red zone' in terms of food security.

In such a situation, adopting a regressive policy that exploits the poor for revenue generation is highly condemnable, he said.

"We have repeatedly said that if the government wants to collect revenue, it should tax the chairs of our industries and the wealthy businessmen, not VAT on food that feeds the poor," he said.

"The government is using bread and biscuit companies as tools for exploiting the poor. We do not want to play this role," he added.