Bangladesh’s restaurant industry has called for sweeping tax cuts, easier access to credit and a major regulatory overhaul, warning that rising utility costs, persistent inflation and complex licensing requirements are pushing many businesses toward financial distress.
At a press conference in Dhaka on Saturday, the Bangladesh Restaurant Owners Association (BROA) presented a seven-point reform agenda ahead of the FY2026-27 budget, arguing that the country's hospitality sector is struggling under mounting operational pressures.
BROA leaders said repeated increases in electricity and LPG tariffs, coupled with high food inflation and a broader credit squeeze, have sharply raised operating costs, particularly for small and medium-sized restaurants.
One of the association’s key demands is the reduction of VAT on catering services from 15% to 5%, bringing it in line with the rate currently applied to dine-in restaurants.
The group argued that the existing tax disparity creates market distortions and unfair competition within the food service industry.
The association also urged the government to withdraw the proposed 0.5% source tax on essential commodities and remove supplementary duties on key food inputs, warning that such measures would further increase food prices at a time when consumers are already under pressure.
BROA additionally called for mandatory VAT registration of street food vendors and informal food outlets, saying a broader tax net would create a level playing field and improve revenue collection.
A major concern raised by the industry is the licensing process, which currently requires restaurant operators to obtain approvals from multiple agencies.
According to BROA, opening and operating a legal restaurant often involves navigating 10 to 12 separate regulatory requirements.
To address the problem, the association proposed introducing a centralized one-stop service platform that would integrate trade licences, fire safety, environmental clearances and sanitation approvals under a single digital system.
While critical of several proposed tax measures, BROA welcomed the government's decision to offer accelerated depreciation benefits for hospitality investments outside Dhaka and urged Bangladesh Bank to facilitate low-interest financing for registered restaurant entrepreneurs.
The demands underscore growing concerns within the hospitality sector, which says survival -- not expansion -- has become the primary challenge amid rising costs and slowing consumer spending.