High taxes prevent tourists from coming to Bangladesh

VAT and other taxes on hotels, motels, and goods associated with the tourism industry are much higher than those of other countries

Current value added tax (VAT) and other high tax rates were found to be major obstacles to developing Bangladesh's tourism industry, a parliamentary body said on Wednesday.

VAT and other taxes on hotels, motels, and goods associated with the tourism industry are much higher than those of other countries. This is a major obstacle to attracting foreign tourists, said the parliamentary standing committee on civil aviation and Tourism Ministry.

In a meeting at Jatiya Sangsad, with Awami League lawmaker RAM Obaidul Muktadir Chowdhury in the chair, it was said the municipality and city corporation have started the process of collecting holding tax at a new rate and 5% tax from those staying in hotels or motels, which will directly hinder the industry's development.

In the meeting, Bangladesh Parjatan Corporation said tourism is one of the fastest growing sectors in the world. But in Bangladesh, taxes are levied at various levels, including service sub-sectors, such as hotels, motels, restaurants, and amusement parks.

In many cases, taxes are taken from service providers and receivers of the same service, meaning that double taxation is taking place, the organization said.

It was mentioned that Bangladesh Parjatan Corporation has to pay 15% VAT, 5% supply tax on purchased goods, and 5% on the revenue received.

Due to giving so much VAT and income tax in addition to paying salaries and allowances, the existence of the corporation has become impossible, the corporation added.

According to the committee, authorities should take an integrated approach to keep taxes at a tolerable level in all the related sectors, including the various service sub-sectors in the tourism industry.

The meeting recommended taking necessary measures by holding a meeting involving Dhaka north and south city corporations, the Finance Ministry and the National Board of Revenue.

About the obstacles in Cox's Bazar, lawmaker Obaidul said although the 24-hour security system has been beefed up in the location, there is no means of recreation at night, and that is why tourists usually stay in the hotel area.

The committee also recommended demolishing all old infrastructures in Cox's Bazar and building a modern tourist city.