The BNP on Saturday demanded the government withdraw its “imprudent” decision of imposing Value Added Tax (VAT) and supplementary duties on more than a hundred products, considering public suffering.
“We call for immediate withdrawal of the irresponsible decision of imposing taxes and VAT or indirect taxes on the common people,” said BNP Secretary General Mirza Fakhrul Islam Alamgir.
He made the demand at a press conference at the BNP Chairperson’s Gulshan office.
Fakhrul said the VAT and indirect taxes imposed by the interim government will further increase the suffering of people.
Amidst the ongoing economic instability and high inflation, he said, the interim government imposed VAT and supplementary duties on more than 100 products and withdrew tax exemptions on certain items, including daily necessities such as food, clothing, medicines and mobile internet services.
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“This decision will have a negative economic impact on the daily lives of the common people, particularly the poor and middle class,” the BNP leader said.
Fakhrul said BNP is concerned about the impact of such a decision by the interim government 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 for the IMF loan, since they are unable to meet budget expenses with the current revenue.
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In November 2024, he said the interim government printed a new Tk 22,500 crore and released it into the market to address the liquidity crisis of certain banks, which had been looted during the Awami League regime.
“Although this government had said at the beginning of its term that money would not be printed under any circumstances in the country's economy, like the Awami League government, it has taken the extremely harmful step of printing taka, which has further exacerbated the country's high inflation and increased the people's suffering," the BNP leader said.
Considering the current economic situation, Fakhrul said the interim government's decision to impose new taxes will push the current inflation rate of around 13% 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, which stands at 5.82%, will continue to decline, leading to a decrease in employment and an increase in the number of unemployed.
Fakhrul also warned that the cost of fuel will rise further due to high prices, compliance pressure on small businesses will intensify and business expenses and production costs in factories will increase.
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As a result, he said, the purchasing power of consumers will decrease and the livelihood of the lower-income people will become even more unbearable.
The BNP leader said investment in businesses will decline, export competitiveness will weaken, and ultimately, the economy and the people of the country will suffer severe consequences.
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.
In the current situation, he said, the government should first focus on reducing costs.
By reconsidering the development budget and cutting unnecessary or financially unfeasible projects, the BNP leader said the government can save up to 20% of its expenses, potentially saving around 60,000 crore taka.
The BNP leader also suggested that cutting costs in local government budgets and subsidies can reduce operational costs by 10%, saving at least Tk 50,000 crore.
Besides, he recommended reducing loan budgets for autonomous institutions as a means to temporarily cut costs.
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Fakhrul said the government can save at least 1 lakh crore taka from the budget by cutting expenditures, which will 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 its failure to control inflation, which rose by 11% despite an 8% increase in income.
The BNP leader slammed the 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.
The BNP leader also pointed out inefficiencies between government ministries, which have led to increased adversity for the people.
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 first focus on addressing an interim budget, excluding the budget of plundering the Awami League. "In the current context, it is a very difficult task to implement a budget designed for looting.”
He called upon the government to move forward with an interim budget that reflects the country's economic reality.