Restaurant owners threaten strike unless govt reconsider VAT hike plan

Bangladesh Restaurant Owners Association has threatened that they will go strike unless the government reconsiders its plan to increase Value Added Tax (VAT) on hotels and restaurants.

The restaurant owners issued the warning at a press conference held at a hotel in Dhaka on Thursday.

Imran Hasan, secretary general of the Restaurant Owners Association, expressed concern at the press conference highlighting the current high inflation rate.

He said the plan would directly impact the general people.

He suggested that the government could reduce administrative costs and cut unnecessary projects to address budget deficits instead of imposing such a heavy tax burden on businesses.

The National Board of Revenue (NBR) has proposed raising VAT on food at hotels and restaurants.

Currently, patrons at regular and air-conditioned (AC) restaurants pay a 5 per cent VAT, which could rise to 7.5 per cent.

The VAT for non-AC hotels is proposed to be doubled from 7.5 per cent to 15 per cent.

Hasan criticised the government for relying on VAT as a primary revenue source instead of expanding direct taxes.

“Only about 525,000 businesses are VAT-registered, with roughly 350,000 paying VAT regularly. The NBR has not taken effective steps to bring the millions of unregistered businesses under the VAT net,” he said.