Tax Hikes and 12% Inflation Deepen Crisis in Everyday Life

Staff Reporter

The government’s recent decision to increase VAT and taxes is significantly raising the cost of living for ordinary people, further straining lives already affected by 12% inflation. Here’s a snapshot of the areas experiencing increased costs:

Restaurant VAT Tripled
Previously, a meal costing Tk 1,000 incurred Tk 50 VAT. Now, the same VAT applies to a meal costing just Tk 300. This change discourages middle- and upper-income families from dining at restaurants. Street-side food carts may remain unaffected, but those preferring a pleasant restaurant experience will feel the pinch. The VAT added at the end of the bill could equal the cost of an additional dish.

Mobile and Internet Costs Double
A 3% VAT on mobile recharges means users receive only Tk 43.70 for a Tk 100 recharge. Internet services now include a 10% tax, increasing the cost of digital services. For instance, an internet package previously priced at Tk 300 now costs Tk 330.

Healthcare Costs Rise
VAT and surcharges on fruits, nuts, and juices have surged, raising costs for patients relying on these items as part of their diet.

Higher Clothing VAT
VAT on garments has increased from 7.5% to 15%. A panjabi priced at Tk 3,000 now includes an additional Tk 450 in VAT. Tailoring services also face a 15% VAT.

Increased Tax on Sweets, Tissue, and Essentials
Items like sweets, biscuits, juice, cakes, and sauces now carry VAT rates of 15-30%. Tissue VAT has doubled to 15%, making basic items less affordable.

Higher Medicine Costs
VAT on domestic medicines has risen from 2.4% to 3%. While seemingly minor, this hike burdens families who already face increased pharmaceutical prices. Essential medicines like insulin have recently seen price hikes of Tk 10-20, and the additional VAT could add Tk 500-1,000 in monthly costs for families.

Burden on Imported Goods
Surcharges on soap have increased by 15%, reaching 60%, while detergents now carry an additional 10% tax, pushing these items out of reach for many.

As Ramadan approaches, the cost of fruits and Eid clothing will pose challenges for ordinary people. Tax hikes could dampen the festive spirit.

More than 100 items have seen tax increases, reducing purchasing power for essential goods. Experts warn this decision could exacerbate inflation and further disrupt the lives of ordinary citizens.