NBR halves VAT on biscuits

The National Board of Revenue has halved the value added tax, or VAT, imposed on handmade and machine-produced biscuits.

Instead of the 15 percent rate imposed in January, the products will now see a VAT rate of 7.5 percent, according to a notice signed by NBR Chairman Md Abdur Rahman Khan on Wednesday.

In January, midway through the fiscal year, the government increased the VAT and supplementary duty on more than a hundred goods and services. The list also included baked products, biscuits and cakes. The VAT on these products was increased from 5 percent to 15 percent.

Alongside the criticism of the VAT imposed on products like biscuits, traders have called for a reduction in the VAT rate.

Following two meetings where traders voiced their concerns, the NBR assured them the additional VAT would be reduced.

After a second meeting with the NBR on Feb 6, the Bangladesh Auto Biscuits and Bread Manufacturers’ Association demanded the withdrawal of the newly imposed VAT and duty on processed food products.

The organisation’s president, Shafiqur Rahman Bhuiyan, told reporters that day: “We are trying to pester the NBR again and again. I told the chairman, ‘We have received assurances from you [in the previous meeting]’. But we have come to bother you again as we have not seen the promises put into practice.”

He said, “The VAT member gave us assurances and said ‘Keep quiet for three to four days and let us do the work, you will see the results’.”

Two weeks after that meeting, biscuit traders now have their “results”.