Only thirteen days after the value-added tax (VAT) and supplemental duty (SD) on more than 90 goods and services were raised, they have already been lowered for eight industries, including restaurants, mobile talk-time, medication, and the internet. The National Board of Revenue (NBR) announced in a press release today (January 22) that the higher VAT on non-branded apparel has also been removed, in addition to these four industries.
The government increased VAT and SD on more than 90 goods and services earlier on January 9, including restaurants, internet, mobile phone time, fruits, juices, drinks, and tobacco items. This morning, the NBR news statement stated, “The withdrawal of the additional VAT on medicine will ensure the continued growth of the pharmaceutical industry and prevent price hikes at the consumer level.”Consumer costs in these two areas will not increase if the higher or recently imposed supplemental charge on mobile phone and ISP services is completely removed.
The higher VAT hasn’t been completely removed, though, for hotels without air conditioning, confectioneries, and clothing sold under private labels. Prior to the rise, the VAT rate for these products was 7.5%, however it has now been lowered from 15% to 10%. This indicates a 2.5% effective increase over the previous rate. The government’s decision comes after the sudden increase in prices for many products and services caused economic shockwaves and sparked significant dissatisfaction among companies and customers.
Source: The Business Standard
