DCCI brands VAT, SD hike a suicidal move

Dhaka Chamber of Commerce and Industry (DCCI) President Taskin Ahmed has called on the government to reduce its expenses by 20%, potentially saving Tk 50,000 crore, instead of burdening businesses with increased Value Added Tax (VAT), Supplementary Duty (SD), and gas prices.

Speaking at a press briefing in Motijheel, Ahmed strongly criticized the government's decision to raise VAT and SD on over 100 products and services through two ordinances issued Thursday night. The hikes, effective immediately, have increased costs for essentials such as mobile usage, clothing, restaurant dining, and LP gas. Ahmed described the move as "suicidal," warning it would escalate inflation, harm trade, and deter both local and international investments.

Ahmed also voiced alarm over a proposed 150% increase in gas prices, which would see industrial users paying Tk 75.72 per cubic metre beyond their sanctioned load, up from the current flat rate of Tk 30.75. Citing a 200% rise in gas prices over the past three years, Ahmed warned that further increases would devastate businesses already grappling with insufficient gas supply.

Urging a separation of politics from economic policies, Ahmed cautioned businessmen in politics against politicizing business matters. He pointed to economic challenges such as depleting foreign exchange reserves, rising energy costs, inflation, and high-interest rates, all exacerbated by global geopolitical instability.

Ahmed outlined DCCI's priorities for 2025, including: controlling inflation to stabilise the economy and ensure affordability, stabilising exchange rates: To protect businesses from forex volatility, reducing interest rates to ease borrowing costs for businesses.

Ahmed also urged the government to expedite low-cost financing for the CMSME sector, vital for employment generation.

Acknowledging delays in Bangladesh's LDC graduation due to the COVID-19 pandemic, the Russia-Ukraine war, and local political instability, Ahmed called for detailed stakeholder consultations to assess readiness and suggested deferring the timeline if necessary.

To boost revenue, he emphasized increasing the tax-GDP ratio by broadening the taxpayer base. He also urged the government to cut unnecessary projects, adopt austerity measures, and improve monitoring of Annual Development Programme (ADP) implementation.

The event was attended by DCCI Senior Vice President Razeev H. Chowdhury, Vice President Md. Salem Sulaiman, and other board members, who echoed Ahmed's concerns and emphasized the need for urgent policy reforms to safeguard Bangladesh's economic stability.

EAR/NMA