Farmers to bear the brunt of increased VAT, duties: BAPA President

Farmers are set to become the biggest losers if the prices of processed food products rise due to increased VAT and duties, warned industry experts at a recent roundtable discussion.  

Speaking at the event titled 'Additional Tax Burden on Consumers: What to Do to Overcome,' organised by Jagonews24.com at the MCCI Conference Hall in Gulshan on Wednesday (February 12), Bangladesh Agro Processors Association (BAPA) President MA Hashem highlighted the cascading effects of higher taxes.  

"If prices of processed foods increase, consumers will buy less, forcing companies to reduce their procurement of agricultural raw materials. This will directly hurt farmers, who will struggle to get fair prices for their crops," Hashem explained.  

He emphasised that the tax hike would not only burden farmers but also affect ordinary consumers. "Processed foods like biscuits and cakes will become more expensive, hitting low-income families, labourers, and marginal farmers the hardest. The government must reconsider this decision," he added.  

Hashem also pointed out the challenges already faced by the agro-processing sector. 

"We’ve been struggling for years with high bank interest rates, frequent power and gas shortages, and rising production costs. Many businesses are barely surviving by taking loans against their homes. If the increased VAT is not withdrawn, many factories may shut down," he said.  

Criticising the lack of consultation with businesses, Hashem noted, "In other countries, governments discuss tax changes with stakeholders. Here, neither the previous nor the current government has consulted us. They impose taxes arbitrarily, leaving the business community without representation. We need stronger dialogue with the government."

The roundtable featured prominent economists and industry leaders, including Dr Mustafa K Mujeri, former Director General of BIDS, economist Dr MM Akash, Khandaker Golam Moazzem, Research Director at the CPD, Dr M Masrur Riaz, Chairman of Policy Exchange Bangladesh, Ahsan Khan Chowdhury, Chairman and CEO of PRAN-RFL Group, Rezaul Hasan, former member of the NBR, Mohammad Hatem, President of the BKMEA, Ashraf Ahmed, former President of the DCCI, SM Nazer Hossain, Vice President of the CAB, Saif Uddin Nasir, Managing Director of SMC Enterprise Limited, Faria Yasmin, Chief Business Officer of ACI Foods, Mohiuddin Rubel and Rajib Chowdhury, former Directors of the BGMEA, Shafiqur Rahman Bhuiyan, President of the Bangladesh Auto Biscuit and Bread Manufacturers Association, Daulat Akhter Mala, President of the Economic Reporters Forum, Md Zakir Hossain, General Secretary of the Supermarket Owners Association, and Saiful Hossain, former banker.  

The discussion was moderated by Jago News Acting Editor KM Zeaul Haque and hosted by Chief Reporter Ibrahim Hussain Ovi.