The country’s supermarket industry is likely to face a massive setback as the government has proposed to double the Value Added Tax (VAT) on sales of superstores, operators have said.
It would be challenging for the supermarket businesses to survive if the proposed VAT hike comes into effect, they said.
The supermarket sector people urged the government to restore the VAT rate to 2% to protect the businesses and help them go forward.
Finance Minister AMA Muhith on Thursday told the Parliament trade vat will be imposed on superstores at the rate of 4% from the existing 2% because the trade vat in all other levels are now 4%.
He said the VAT hike will be made to eliminate existing discrimination.
“Survival will be tough for supermarkets, which are at a growing stage, if the government doubles the trade VAT at a time when we just started surviving from the bad times that we had during the political turmoil in last few months,” said Md Zakir Hossain, general secretary of Bangladesh Supermarket Owners Association.
He also said India has already made a significant progress in supermarket business compared to that in Bangladesh.
“Shwapno started its journey with 74 superstores, which now stands at only 47 due to many reasons including political turmoil. The situation of others is almost similar. The number of supermarkets is decreasing instead of rising and the increased trade vat is also a reason,” Zakir said, fearing that many more investors will lose their interests if the VAT is imposed.
Currently, 2% VAT is applicable on sales of supermarkets like Agora, Shwapno and Meena Bazar while other shops including large ones and departmental stores enjoy package VAT facility under which shop owners pay VAT annually ranging from Tk3,000 to Tk12,000 based on the location and size of shops.
Supermarkets offer essential commodity products to customers under a single umbrella. In the last three years, the number of supermarkets has come down to 96 from 105 due to political uncertainties. Renowned superstores like Nandan and PQS were closed down completely.