THE proposed 15 percent VAT on life-saving drug as a national daily reported on Friday will add to the cost of treatment of patients at a time when the cost of medicine has manifold increased over the past few years. This is not just an isolated move but part of a wider coordinated move of the Finance Minister to realize big revenue targets – no matter how it is going to increase the cost of doing business and common people’s cost of living. Gas price has increased from June 1 and electricity price is set to increase from July 1. Cost of LPG cylinder is scheduled to increase by 15 VAT in the new fiscal year from July.
But why the impact of such negative tax policies is not catching the eyes of the Finance Minister and other policy makers. It is distinctly noticeable from the fact that foreign and domestic investment is not growing enough in the country for an ever-growing energy price and other high corporate taxes. As per World Investment Forum Report-2017 some less developed African countries like Ethiopia and Angola received more FDI last year than Bangladesh and it is natural if tax rates are too high and energy price is rising more than once a year, nobody will be interested to make investment here.
What needs to be mentioned here is that with the rise of all utility prices and cost of essentials like drugs and food items, inflation is also on the rise to make all commodities and services costlier. Excise duty on bank balance is yet another mad drive only to drive money out of the country. What is most striking is that there is a visible gap between what the Finance Minister said about exemption of VAT on many essential goods and services and what is really happening. His claim that 93 life-saving drugs will remain exempted from 15 percent VAT has no bearing so far. Tax on a LPG cylinder will increase by Tk 300 and using two cylinders per month a family will have to spend Tk 4000 now for cooking. Many can’t afford it.
It is ridiculous that a common life-saving drugs – albumin imported in the country and often prescribed by physicians for serious kidney and liver problems and blood related diseases of newborn babies would have to pay a total of 24 percent tax now including 15 percent VAT. We wonder why the Finance Minister does not look at the affordability of the poor patients who arrange fund for treatment selling everything they have. Tax on tractors now being used for plantation in the field similarly has been raised to 24 percent from 5 percent earlier. Many fail to understand why the government policy makers are failing to take into consideration the negative impacts of such tax policies on people’s life and country’s development.
But why the impact of such negative tax policies is not catching the eyes of the Finance Minister and other policy makers. It is distinctly noticeable from the fact that foreign and domestic investment is not growing enough in the country for an ever-growing energy price and other high corporate taxes. As per World Investment Forum Report-2017 some less developed African countries like Ethiopia and Angola received more FDI last year than Bangladesh and it is natural if tax rates are too high and energy price is rising more than once a year, nobody will be interested to make investment here.
What needs to be mentioned here is that with the rise of all utility prices and cost of essentials like drugs and food items, inflation is also on the rise to make all commodities and services costlier. Excise duty on bank balance is yet another mad drive only to drive money out of the country. What is most striking is that there is a visible gap between what the Finance Minister said about exemption of VAT on many essential goods and services and what is really happening. His claim that 93 life-saving drugs will remain exempted from 15 percent VAT has no bearing so far. Tax on a LPG cylinder will increase by Tk 300 and using two cylinders per month a family will have to spend Tk 4000 now for cooking. Many can’t afford it.
It is ridiculous that a common life-saving drugs – albumin imported in the country and often prescribed by physicians for serious kidney and liver problems and blood related diseases of newborn babies would have to pay a total of 24 percent tax now including 15 percent VAT. We wonder why the Finance Minister does not look at the affordability of the poor patients who arrange fund for treatment selling everything they have. Tax on tractors now being used for plantation in the field similarly has been raised to 24 percent from 5 percent earlier. Many fail to understand why the government policy makers are failing to take into consideration the negative impacts of such tax policies on people’s life and country’s development.
