Soon there will be only wrappers, no products, say bread makers

Leading biscuit and bread manufacturers have issued a stark warning over the government’s proposed increase in VAT on staple bakery items from 5% to 7.5% in the 2025-26 budget, cautioning that the move could force producers to reduce pack sizes or hike prices, hitting low-income households and students hardest.

At a press conference held at Dhaka Reporters Unity on Saturday, the Bangladesh Auto Biscuit and Bread Manufacturers Association (BABBMA) demanded the immediate and complete withdrawal of the VAT hike, calling it an “unfair, discriminatory, and regressive” tax policy that disproportionately burdens the poor.

“If this VAT is not withdrawn, one day people will open biscuit packets and find only empty wrappers. There will be packets, but no biscuits,” said Shafiqur Rahman Bhuiyan, President of BABBMA, drawing applause from fellow industry leaders.

Despite rising costs of key raw materials, wheat, sugar, and edible oil, the industry has so far refrained from increasing retail prices, Bhuiyan noted. However, the additional 2.5% VAT, he argued, is pushing manufacturers to a breaking point.

“We are being forced to make an impossible choice: either raise prices or shrink pack sizes. Neither is acceptable to us, nor to the public who rely on these affordable foods,” he said.

Bhuiyan questioned the rationale behind taxing basic food items while offering tax breaks to large supermarkets. “The government has removed VAT for the rich, but increased it on the daily bread of the poor. Is this justice? Is this morality?” he asked, labelling the policy as “an insult to the nation.”

He also challenged the government’s claim of progress, pointing out that even previous regimes, widely criticised for authoritarian tendencies, maintained a 5% VAT on bread and biscuits. “Who are the real fascists now?” he asked. “This move contradicts the spirit of the anti-discrimination movement the country recently fought for.”

Shakhawat Hossain Mamun, Vice President of BABBMA, reinforced the call, citing research showing that millions of working-class families and students depend on biscuits and bread for daily sustenance. “According to the World Bank, Bangladesh is already in the ‘red zone’ for food security. In such a context, taxing basic nutrition is not just immoral. It’s dangerous,” he said.

Mamun urged the government to target high-net-worth individuals and industrial magnates for revenue generation instead. “If revenue is needed, tax the billionaires, not the biscuit eater. We refuse to be tools in the exploitation of the poor.”

The association also called for biscuits and bread to be declared essential commodities, with VAT reduced to zero, aligning them with staples like rice and pulses.

BABBMA leaders warned that failure to reverse the policy could trigger a chain reaction: higher prices, shrinking consumer trust, and long-term damage to food affordability and public health.

Indrajit Sarkar, Assistant Vice President of the association, and Abdur Rahman, General Manager of Kishwan Food Industry Limited, were among other industry representatives present at the press event.

As public scrutiny of the new budget intensifies, the biscuit and bread industry’s protest adds growing pressure on the government to reconsider its tax strategy, one that could redefine what ends up on the nation’s breakfast tables.