The National Board of Revenue (NBR) is poised to roll back Value Added Tax (VAT) and Supplementary Duty (SD) rates on mobile phone usage, medicines, and restaurants in response to widespread public outcry over recent tax hikes.

The government had previously increased indirect taxes on nearly 100 products and services to boost domestic revenue and meet conditions set by multilateral lenders.

The SD rate is expected to revert to 20% from 23%, which was the increased rate for mobile phone usage.

Broadband internet’s SD is likely to be reduced to 5% from 10%, effective retroactively from January 9, 2025.

Trade VAT may be restored for medicine to its previous rate of 2.4%, down from 3%. VAT on restaurant services is anticipated to decrease from 15% to 5%, except for 3 to 5-star hotels, which will continue to attract 15% VAT as they claim input tax credit.

The decision, confirmed by Mohammad Belal Hossain Chowdhury, Member (VAT Policy, Current Charge) at the NBR, aims to address concerns raised by businesses and consumers about the burden of increased indirect taxes.

“We will issue an order in this regard soon,” Chowdhury said.