Restaurants urge govt to cut VAT following pandemic

Dhaka : The restaurant industry of the country has been alarmingly harmed by the coronavirus pandemic. As a result, now it is in dire need of a VAT reduction, for moderate, lower categories of restaurants in the proposed budget for FY22.
At a press conference organised by the Bangladesh Restaurant Owners Association (BROA) on June 12, restaurateurs raised a seven-point demand, including a cancellation of 10 per cent supplementary duty on some food items like pizzas, burgers and others.  
"The finance minister has proposed a 15 per cent VAT for air-conditioned and 5 per cent for non- air-conditioned restaurants. Earlier, non-air-conditioned restaurants had to pay 7.5 per cent VAT." 
"We demand a maximum of 3-5 per cent VAT for lower and moderate category restaurants and street food, and a 7.5 per cent VAT for fine dining restaurants," said Imran Hasan, Secretary General of BROA.
"The air-conditioned and non-air-conditioned categories for restaurants should be abolished for VAT payment as air-conditioning is a general necessity," Hasan added.
BROA proposed a 15 per cent VAT for five-star and four-star hotels and restaurants and 2 per cent VAT for canteens or cafeterias of educational institutions, hostels and industrial factories.  
The VAT on restaurants' rent can be fixed at a maximum of 3 per cent, the association leader said.
The restaurateurs also demanded BDT 10 lac to BDT 1 crore loans with 4 per cent interest from the stimulus package for the SME sector.
They also demanded that the government declare the sector as an industry and ensure vaccination for staff within September this year.       
The restaurant owners also claimed that they are facing harassment by a third-party involved in VAT collection and monitoring.
"Restaurants which have electronic fiscal devices (EFDs) provided by the National Board of Revenue (NBR) are facing the most harassment. Some young locals, who are not NBR staff but appointed by the ward councilor offices, bring false allegations against these restaurants, saying that they are not using the EFDs and so the owners are facing cases," said Toufiqul Islam, Treasurer, BROA. 
BROA demanded removal of these personnel from the VAT monitoring system and setup of EFD machines in all the restaurants. 
"If the authorities can operate a smooth VAT collection system, the government might receive BDT 2,300 crore per year from the restaurant sector. But now the amount is not more than BDT 200 crore due to mismanagement," said Imran Hasan. 
The restaurant owners also claimed that the online food delivery companies are taking 30-40 per cent commission per delivery, while Indian restaurants are giving only 10 per cent as commission. 
Thus, Ashfaq Rahman Asif, Managing Director of 138 East restaurant in the capital, and Publicity Secretary of BROA said they want a policy for online food delivery services and a maximum 10 per cent commission for them.
Therefore, the association demanded a stimulus package for six months or a monthly food assistance system faor the workers of the sector.