Consumers across Bangladesh are increasingly concerned about the newly imposed duties and tax hikes, fearing that these measures will significantly impact their daily lives and drive up the cost of essential goods.

For over a year, inflation has cast a shadow over both the food and non-food sectors, often reaching double digits and sending ripples through the economy. Now, amidst soaring inflation, the government has raised duties and taxes on over 100 goods and services, including crucial essentials such as medicines, LPG, and mobile SIM cards. These increases burden the economy at every stage—from import to production to the supply chain.

Experts have criticized the interim government’s decision to raise duties and taxes, calling it a short-term fix aimed at boosting revenue. They argue that the move has sparked frustration across the public and businesses in the affected sectors, raising concerns about the long-term economic fallout. Some politicians have described the government’s actions as "anti-people."

Tanvir Zilui, a private sector employee from Mohakhali, said: “The government is focused on raising taxes without considering whether people’s incomes are rising. Inflation is already stubbornly high, and with the VAT hike, prices will inevitably go up. How are we supposed to cope with this burden?”

Aftab Ahmed Sarkar, another private-sector worker from Banani, criticized the government's decision as "hasty." He stated, “The government could have implemented this during the national budget. People are already crushed by high prices, and now the VAT hike will push prices even higher."

Following the ousting of the Awami League government on August 5, 2024, the president dissolved parliament, leading to the issuance of two ordinances raising duties and taxes. The National Board of Revenue (NBR) swiftly implemented the changes, claiming that they would not significantly impact everyday goods. However, experts like Zahid Hussain, a former lead economist at the World Bank, disagree, emphasizing that prices will certainly rise as a result of the tax hikes.

Hussain argued, "Claiming that there will be no impact on inflation is unrealistic. These goods will see price increases, and most products now taxed below 15% will be subject to a 15% VAT. This unification of VAT rates is part of a broader government policy aimed at boosting revenue."

Politicians have warned that the new financial burdens will only worsen the public’s struggle. Communist Party of Bangladesh (CPB) leaders Shah Alam and Ruhin Hossain Prince expressed frustration, calling the decision "driven by high inflation and IMF pressure," and warned that it would worsen the economic crisis for vulnerable groups.

In rural areas, where low-income and lower-middle-class earners are already struggling, the impact of these tax hikes is expected to be particularly severe. Bazlur Rashid Firoz, general secretary of the Bangladesh Socialist Party (BaSaD), emphasized that the decision, influenced by IMF advice, will deepen the crisis.

While essential items like rice, lentils, and edible oils are exempt, a wide range of goods and services are affected by the hikes, including mobile services, restaurant bills, and even items like biscuits, toiletries, and film tickets.

Additionally, duties on a variety of imported goods—including betel nuts, fruits, and tobacco—have risen, and VAT has been increased on products such as kitchen towels, cosmetics, and LPG. VAT on services, including motor vehicle repairs, printing presses, and entertainment venues, has also been raised from 10% to 15%.

Experts believe these tax hikes could drive inflation even higher, further burdening the public. While the government argues that the measures are necessary to meet revenue targets, the timing and scope of the increases have sparked widespread concern. The NBR's goal of raising Tk 40 billion in additional revenue by the end of the fiscal year will likely come at the cost of even higher living expenses for ordinary people.