Finance Adviser Dr Salehuddin Ahmed today said increase of value-added tax (VAT) on 43 goods and services will not significantly impact overall inflation or prices of essentials.

“The VAT increase will not lead to substantial price hike for consumers or negatively affect the lives of common people. The items whose prices are being increased have little importance in driving inflation,” he said.

The adviser made the comments while talking to newsmen after a meeting of the Advisers Council Committee on Government Purchase (ACCGP) at the Cabinet Division conference room at Bangladesh Secretariat in the city.

The advisory council approved the Amendment of Value Added Tax (VAT) and Supplementary Duty Act on Wednesday, resulting to VAT increase on 43 goods and services, including the fresh imposition of VAT on some items.

Responding to a query regarding the impact of the VAT increase, Salehuddin said, "Essential commodities like rice and pulses — key drivers of inflation — will not see increased duties, as their duties have been reduced to zero, offering relief to consumers."

He stated that higher taxes have been imposed on luxury items, such as three-star and higher-rated hotels, while sparing establishments of standard quality.

"The objective is to ensure a balanced revenue collection system that does not inconvenience the general population," he said.

The finance adviser further stated that Bangladesh's tax rates were comparatively low compared to other countries like Nepal and Bhutan.