The BNP yesterday demanded immediate rollback of recently hiked Value Added Tax and supplementary duties on more than 100 products, considering public suffering.

Secretary General Mirza Fakhrul Islam Alamgir made the demand to withdraw the decision to raise the VAT and duty or indirect taxes on the common people, calling it "imprudent and irresponsible.

He said at a press conference at the BNP chairperson's Gulshan office that the interim government's move would further increase the suffering of people, particularly the poor and middle class, amid the ongoing economic instability and high inflation.

Fakhrul said the BNP was concerned about the impact of such a decision on the lives of ordinary people.

He urged the government to adopt alternative measures and reduce unnecessary development expenditures instead of imposing VAT and supplementary duties on essential items.

The BNP leader said the interim government should also take steps for holding the national election to establish an accountable administration.

Fakhrul said the government has increased VAT to cover the first phase of the current fiscal year's budget deficit of Tk 42,000 crore, as well as the potential subsequent deficit, and to meet the Tax-GDP Ratio condition under the International Monetary Fund's loan programme, since the government is unable to meet budget expenses with the current revenue.

He said although the government had said at the beginning of its term that money would not be printed under any circumstances, like the Awami League government, it has taken the "extremely harmful" step of printing Tk 22,500 crore, which has further exacerbated the country's high inflation and increased the people's suffering.

Considering the current economic situation, Fakhrul said the increased taxes would push the current inflation rate even higher. "Rising inflation will erode household savings and lead to increased bank withdrawals," he warned.

Besides, he said, the current downward trend in economic growth will continue, leading to a decrease in employment and an increase in the unemployment rate.

Fakhrul warned that the cost of fuel would rise further due to high prices, compliance pressure on small businesses would intensify and business expenses and production costs in factories would increase.

As a result, he said, the purchasing power of consumers would decrease and the livelihood of the lower-income people would become even more unbearable.

The BNP leader said investments would decline and export competitiveness would weaken because of the increased taxes.

In the current situation, he said, the government should first focus on reducing costs.

Fakhrul suggested that the government can resolve ongoing financial problems by cutting public spending and reorganising the economic management of the current budget, without increasing direct taxes.

By reconsidering the development budget and cutting unnecessary or financially unfeasible projects, the BNP leader said, the government could save up to 20 percent of its expenses, potentially saving around Tk 60,000 crore.

The BNP leader also proposed cutting costs in local government budgets and subsidies which he said could reduce operational costs by 10 percent, saving at least Tk 50,000 crore.

Besides, he recommended reducing loan budgets for autonomous institutions as a means to temporarily cut costs.

Fakhrul said the government could save at least Tk 1 lakh crore from the budget by cutting expenditures, which would reduce the fiscal deficit, contribute to economic stability, and promote long-term development, ultimately alleviating the tax burden on the public.

He slammed the government for a "lack of coordinated action" in monetary, fiscal, and market management to control inflation.

He said neighbouring countries effectively managed inflation, while Bangladesh's conflicting policies, such as raising interest rates and taxes, worsened the situation.

Fakhrul also suggested that a significant amount of money can be saved by halting funding for unnecessary and corruption-riddled mega projects.

BNP Standing Committee member Amir Khosru Mahmud Chowdhury said the government should focus on an interim budget that reflects the country's economic reality, scrapping the Awami League's budget "designed for looting".