Bangladesh Govt cuts VAT on internet services to 5%, raises taxes on cigarettes

The government has lowered Value Added Tax or VAT on internet services provided by ISPs and mobile telecom operators to 5 percent from the current 15 percent.
Parliament passed the Finance Bill for 2018-19 fiscal year with some other changes in proposed taxes in the national budget on Wednesday after Prime Minister Sheikh Hasina took part in the budget discussion.

In the Bill made by Finance Minister AMA Muhith, the government has raised taxes on cigarettes following anti-tobacco campaigners’ demand.

He has also withdrawn supplementary duty on petroleum jelly so that the poor can use it during winter for skin care.

Muhith told parliament he was cutting VAT on internet services to make IT services more available to the people.

The price of 10-stick cigarette packs under the lowest price slab was raised to Tk 35 from Tk 32, according to him.

The price of 10-stick cigarette packs under the highest price slab was raised to Tk 105 from Tk 101.

The minister said the rise in taxes on cigarettes aimed to cut the number of smokers.

There has not been much criticism over the Tk 4.64 trillion budget proposed by Muhith on June 7, except for the troubled banking sector.

Muhith faced intense criticism from the MPs from both Treasury and Opposition bench for proposing no reforms to the sector in the budget.

The finance minister, who has made record 10 budgets in a row, presented the reviewed proposals following Hasina and the Leader of the Opposition Raushon Ershad’s speeches.

He said he brought in some new proposals after examining recommendations by different quarters, including businesses, made in post-budget discussions.

The Finance Bill was passed by voice vote when Muhith presented it after his closing speech on the budget.

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