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The commerce ministry requests the National Board of Revenue (NBR) to reduce VAT (value-added tax) on the beauty industry to 5.0 per cent in the all-female trade, officials say.
The government imposed a 15-per cent tax on the import of beauty products in the 2021-22 fiscal budget.
Seeking a reduction in VAT, the Beauty Service Owners Association of Bangladesh recently sent a letter with an appeal to the commerce ministry.
It was then forwarded to the National Board of Revenue (NBR) for consideration as a tax-VAT regulator.
"We have received the plea and are working on the issue," says a desk official of the NBR.
According to the letter, the beauty industry is playing an important role in bringing women into mainstream economic activity.
At a pre-budget parley in Chattogram in March, NBR chairman Abu Hena Md Rahmatul Muneem said VAT on salon services would not be reduced in the next budget.
Later, the owners' association wrote to the commerce ministry with a request for action to save this potential industry.
Industry insiders claim beauty salons have become a casualty of the Covid-19 pandemic. Beauty entrepreneurs have gone to the wall. It is hard for them to survive unless state support.
"Currently, we have to pay a 15-per cent VAT on our total service value. We have requested the government to reduce it to 5.0 per cent," a parlour operator says.
Revenue collection will get a boost and the sector may be saved from this disastrous situation if the government reduces VAT for the sector, he adds.
Besides, the current fiscal budget has imposed a 15-per cent tax on the import of beauty products. For this, prices of beauty goods have been increased.
According to the association, cultural functions like marriage ceremonies reduced significantly and the arrival of customers also dropped severely during the pandemic.
The current VAT management and the scourge of Covid-19 hit the industry hard, it says.
The owners claim that many beauty firms put up the shutters for VAT increases amid the pandemic.
An entrepreneur needs a large floor at any important city place to run this business. He or she has to count a bid amount as rental per month, they say.
Besides, the burden of electricity, gas, WASA and internet bills is there.
Small and large-size beauty shops, salons and spas are currently in operation in all 64 districts.
There are 0.3 million and 0.5 million VAT-registered parlours, and gent's parlours and salons respectively in Bangladesh, reads the letter.
An estimated 1.0-million women, including owners and service providers, are involved in the ladies' parlour, salon and spa business, it cites.