The government has decided to impose Value Added Tax (VAT) on local industries involved in the manufacturing of refrigerators and freezers to make the market more competitive and to achieve a higher collection of tax revenue.
Finance Minister AHM Mustafa Kamal proposed imposing a 5% VAT on locally-manufactured goods in the budget for the 2022-2023 fiscal year presented at the parliament on Thursday.
However, manufacturers have been exempted from import duty for raw materials until 2025.
Industry players involved in manufacturing such electronic products argue that the move is likely to disrupt the growth of the sector and it goes against the idea of a ‘Digital Bangladesh’.
The local refrigerator manufacturers have been enjoying VAT exemption since 2010, as part of policy support of the government to develop the local market that was previously dominated by foreign brands.
According to Marketing Watch Bangladesh (MWB), before 2010, foreign brands had around 80% share of the refrigerator market with the remaining 20% market being the contribution of aspiring local brands.
