The short-sighted policies on VAT and tax hikes in Bangladesh

The recent decision to raise taxes on over a hundred products has sparked widespread concern among the general public.

- MA HOSSAIN

At a time when inflation is soaring and economic conditions are worsening, the introduction of these measures has further strained the financial capacity of ordinary citizens.

This increase in taxation, which predominantly affects essential goods and services, will undoubtedly lead to higher market prices, making life more challenging for the poor and middle classes. The government's reliance on indirect taxes as a primary source of revenue is a troubling trend that disproportionately burdens the population, as such taxes are directly linked to the cost of goods and services.

In an economy already grappling with declining purchasing power, the timing of these tax hikes raises serious questions about the government's priorities. By shifting the tax burden onto the general population rather than the wealthy, the policy fails to address systemic inequalities. Wealthy individuals and corporations often evade taxes or benefit from various tax breaks, despite earning substantial incomes and accumulating significant wealth.

This disparity in tax collection undermines social justice and economic stability. The government must adopt stricter measures to curb tax evasion and ensure that the wealthy contribute their fair share to the national exchequer. By doing so, the need for such harsh indirect taxes could be minimized, easing the burden on ordinary citizens.

The decision to suspend the Trading Corporation of Bangladesh (TCB) truck sales program has further compounded the hardships faced by the poor. This program, which provided essential goods at subsidized prices, was a lifeline for low-income families. In the context of high inflation and unstable incomes, its suspension reveals a disconnect between the government's economic policies and the realities on the ground.