Restaurants urge government to cut VAT following pandemic

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(MENAFN – Bangladesh Monitor) Dhaka: The country’s restaurant industry has been alarmingly affected by the coronavirus pandemic. As a result, there is now an urgent need for a reduction in VAT, for moderate and lower categories of restaurants in the proposed budget for fiscal year 22.
At a press conference organized by the Bangladesh Restaurant Owners Association (BROA) on June 12, restaurateurs raised a seven-point demand, including the cancellation of the additional 10% tariffs on certain food products like pizzas, burgers and others.
“The Minister of Finance has proposed a VAT of 15% for air-conditioned restaurants and 5% for non-air conditioned restaurants. Previously, non-air conditioned restaurants had to pay 7.5% VAT.
“We demand a maximum of 3-5% VAT for lower and middle category restaurants and street food, and 7.5% VAT for gourmet restaurants,” said Imran Hasan, general secretary of BROA.
“Air-conditioned and non-air conditioned categories for restaurants should be removed for VAT payment, as air conditioning is a general necessity,” added Hasan.
BROA proposed a 15 percent VAT for five- and four-star hotels and restaurants and a 2 percent VAT for canteens or cafeterias in educational institutions, inns and industrial factories.
VAT on restaurant rents can be set at a maximum of 3 percent, the association official said.
The restaurateurs also applied for BDT 10 lac loans to BDT 1 crore with 4% interest from the stimulus plan for the SME sector.
They also demanded that the government declare the sector as an industry and ensure the vaccination of staff in September this year.
Restaurant owners also claimed they were being harassed by a third party involved in collecting and controlling VAT.
“Restaurants with electronic tax devices (EFDs) provided by the National Board of Revenue (NBR) are the most harassed. Some local young people, who are not NBR staff but appointed by the offices of the ward councilors, make false allegations against these restaurants, saying that they do not use DFEs and therefore the owners face case, ”said Toufiqul Islam, treasurer of BROA.
BROA demanded the removal of this staff from the VAT control system and the installation of EFD machines in all restaurants.
“If the authorities can set up a smooth VAT collection system, the government could receive 2300 BDT crore per year from the restaurant industry. But now the amount is no more than 200 BDT crore due to mismanagement. “said Imran Hasan.
Restaurant owners also claimed that online food delivery companies take 30-40% commission per delivery, while Indian restaurants only pay 10% commission.
So Ashfaq Rahman Asif, general manager of 138 East restaurant in the capital and advertising secretary of BROA, said he wanted a policy of online food delivery services and a maximum commission of 10 percent for them.
The association therefore called for a six-month recovery plan or a monthly food aid system for workers in the sector.

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