The Consumers Association of Bangladesh (CAB) has urged the government to withdraw its recent decision to increase VAT and supplementary duties on over 100 essential goods and services, citing its potential to exacerbate inflation and intensify public suffering.

Following recommendations from the International Monetary Fund (IMF), the National Board of Revenue (NBR) issued a notification imposing higher VAT and supplementary duties on items such as mobile and internet services, medicines, LPG, fruits, biscuits, detergents, soaps, tomato ketchup, kitchen towels, raw materials for rod production and other products, it said in a statement on Sunday.

CAB Chattogram division leaders expressed concern that the decision would worsen the struggles of lower- and middle-income families already reeling from high inflation and soaring costs of essentials.

The statement said food inflation in 2024 remained consistently high, peaking near 14% in November and around 13% in December.

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Prices of non-food essentials also rose sharply, making it increasingly difficult for families to manage people’s expenses, it added.

The recent VAT hikes will only fuel inflation further, creating an environment ripe for unscrupulous businesses to raise prices indiscriminately, the CAB leaders said.

CAB leaders said that previous initiatives such as withdrawing VAT and import duties on 29 items, failed to benefit consumers due to the absence of monitoring, as corporate groups and importers pocketed the savings.

They also criticised the decision to raise VAT on life-saving medicines, warning of dire consequences for families already burdened with rising medical costs.

CAB urged the government to focus on broadening the VAT base, simplifying tax procedures, and preventing tax evasion.

They also called for increased transparency and accountability in the NBR.

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Instead of imposing indirect taxes that disproportionately affect low-income groups, the government should emphasise direct taxation to ensure equitable revenue collection, the statement added.

CAB leaders demanded the immediate withdrawal of the VAT and supplementary duty hike or at least its suspension until after Ramadan to mitigate public suffering.