15% uniform VAT won’t affect prices of essentials: Muhith

Reiterating his determination to keep 15 percent unified value-added tax (VAT) in the next fiscal, Finance Minister AMA Muhith today claimed that the uniform VAT will not affect the price of essentials.

The 15 percent uniform VAT will not affect the price of essentials as many necessary items will be kept out of the purview of it, he said while talking to reporters at his secretariat office in Dhaka.

“The VAT [15 percent uniform VAT] rate couldn’t be slashed. Problems will arise if it comes down,” Muhith said.

Muhith backtracked on his position this afternoon of keeping 15 percent uniform VAT in the next fiscal, a day before he said that the government was considering reduction of the rate to 12 percent.

On May 25, the finance minister said the government was exploring other ways to make up for the revenue loss as a result of a cut in the uniform VAT rate under the new law.

The law prescribes a uniform 15 percent VAT rate for most goods and services, and the government now considers reducing the rate to 12 percent amid opposition.