The Bangladesh Agro-Processors Association (BAPA) has called on the interim government to reverse the increased Value Added Tax (VAT) and other taxes on agro-processed food products within the next seven days.

They also urged the government to halt plans for raising gas prices, warning of dire consequences for the industry.

During a press conference at Dhaka Club in Dhaka, BAPA President MA Hashem expressed grave concerns about the tax hike’s impact on food processors and consumers.

The food processing sector, which employs around 250,000 workers and supports marginal farmers, faces the risk of production halts if the current policies persist.

Hashem noted that higher gas prices and increased VAT on essentials like biscuits and confectioneries would make affordable food items inaccessible to low-income households.

VAT on biscuits, cakes, and processed foods like pickles, ketchup, and fruit pulps increased from 5% to 15%.

Supplementary duty on fruit juices and drinks rose from 10% to 15%, and flavored or electrolyte drinks from 0% to 15%. Merchant-level tax rose from 5% to 7.5%.

“The government claims these measures will have minimal impact, but the reality is quite different,” Hashem said, emphasizing the daily struggles of low-income individuals who rely on affordable staples like biscuits and tea.

BAPA announced plans to seek a direct meeting with Chief Adviser Prof Muhammad Yunus to discuss the matter and prevent disruptions to the industry.

On January 9, the National Board of Revenue implemented the tax changes, affecting over 100 goods and services. The measures were introduced to bolster revenue collection but have since sparked a significant backlash from industry leaders and consumers alike.

The food processing sector has urged the government to reconsider these decisions to protect employment, maintain affordability, and ensure the industry’s sustainability.