TDS Desk:

The interim government has decided to return to the old duty regime for mobile bills, medicines and restaurants, and halt last week’s VAT hikes. Furthermore, new VAT hikes for other products will be reduced.

National Board of Revenue (NBR) member Mohammad Belal Hossain and the organisation’s Second Secretary Barrister Md Badruzzaman Munshi confirmed the latest duty relief measures Thursday morning, saying a notification will be issued within a day or two in this regard.

To avoid harming the interests of low-income earners, the government has decided to scrap the plans, NBR officials said.

Under the new decision, VAT on restaurants will be retained at 5%. On 9 January, the government decided to hike the VAT for eating at restaurants to 15%, for medicines to 3% from 2.4% at the production stage, and for mobile use to 23% from 20%.

Furthermore, VAT on branded clothes and sweets as well as non-AC residential hotel rents will be hiked to 10% from 7.5% instead of the initially approved 15%. Airfare tariffs will be completely exempted for Hajj pilgrims, it has been decided, reversing the earlier decision to hike tariffs for all types of air travel.

Last week’s hikes were planned to unlock a tranche of IMF’s $4.7 billion bailout package. The IMF has set a condition to raise the tax-GDP ratio to 2% by means of duty hikes only.

Protesting the tax hikes, restaurant owners called for forming a human chain on Thursday. Drug companies also notified the government that the duty hikes on medicines would hike health care costs for all income groups.