Restaurant owners have demanded the complete withdrawal of source tax on essential commodities and the introduction of a uniform tax regime for the sector, warning that rising costs are pushing the industry into deeper distress.
The Bangladesh Restaurant Owners’ Association placed the demands at a press conference held at its headquarters in Bijoynagar, Paltan, on Friday, outlining a seven-point proposal for the upcoming FY2026–27 budget.
In a written statement, the association’s Secretary General Imran Hasan thanked the government for attempting to formulate a business-friendly budget despite prevailing economic challenges, including high inflation and stress in the banking sector.
However, he said the restaurant industry is struggling under mounting operational costs, particularly due to higher prices of LPG and electricity, which have significantly increased the cost of doing business.
Highlighting disparities in the existing tax structure, Hasan noted that varying VAT rates for restaurant and catering services have created uneven competition. He proposed a uniform 5 percent VAT and tax rate across all types of services to ensure fairness and predictability.
He also stressed the need to bring all food service providers, including street food vendors, under VAT registration to reduce market distortions and improve revenue collection.
Calling for the complete withdrawal of proposed source tax and supplementary duties on essential goods, Hasan argued that such measures would further burden consumers already grappling with inflation and rising living costs.
The association welcomed the government’s move to offer tax relief on new establishments and equipment to encourage investment in the restaurant and tourism sectors outside Dhaka. It particularly praised the provision allowing 60 percent depreciation in the first year and 40 percent in the second year for new investments, describing it as a positive step.
However, Hasan said additional measures are needed to stimulate investment, including ensuring access to low-interest bank loans through policy support from the Bangladesh Bank and the Ministry of Finance.
The association also opposed the proposal to extend VAT payment intervals from monthly to quarterly, urging the government to retain the existing monthly payment system to maintain business liquidity and compliance.
Among other demands, the organisation called for the introduction of a “one-stop service” to bring the sector under a coordinated compliance framework, along with the formulation of a dedicated industrial policy for the restaurant industry.
It also stressed simplifying licensing and tax procedures, noting that businesses currently need approvals from 10 to 12 different agencies, making operations complex and costly.
Association leaders, including Vice-President Shah Sultan Khokon, Joint Secretary General Firoz Alam Sumon and Organising Secretary Toufiqul Islam, were present at the press conference.