Down under VAT glut
Returning early from work, Mahbub Alam, an employee of a non-government organisation, flopped down on his couch and turned the TV on to watch the budget speech yesterday. He hoped that there would be something in the speech that would make it a little easier for him to get through Ramadan, for him the most expensive month of the year, and the next fiscal year.
Mahbub runs a family of five and spiralling prices of essentials ahead and during Ramadan is a major concern for many from the middle class like him.
Sipping his afternoon cup of tea, Mahbub watched as the finance minister opened his chocolate colour briefcase, got documents out and started delivering his speech.
To Mahbub's relief, he learnt that imports of consumer goods, including edible oil, lentil, sugar, onion and garlic would continue to enjoy zero duty, which means prices should not go up.
However, he knew people may have to pay higher prices as most of those have already increased just ahead of Ramadan.
Mahbub is looking forward to his eldest of two sons graduating next year and getting a job and supporting the family. He was keen to know if there would be more jobs since finding work in the private sector was becoming difficult.
He did not hear anything from the finance minister that would give him hope. Rather, he heard the prices of imported books would go up as increased import duty on books had been proposed.
That's bad news for him. His youngest son is going to sit for the A-levels and that would increase his expenditure a lot.
And there was more bad news. The finance minister proposed doubling the Value Added Tax (VAT) on small businesses in city corporations and municipalities areas.
Mahbub knows very well that at the end of the day the consumers would be paying those.
He realised that he has to cut down talking on his phone and using mobile data since prices of those were going up.
With another cup of tea, his wife Ahesha Begum sat beside him and asked prices of what else were going up.
By then, he knew washing machines, bidis, low cost cigarettes and gul and jorda, air coolers, uninterrupted power supplies, instant power supplies, fingerprint scanners, medical equipment, electric mosquito zapping bats, modern machines used in hotels, bread and buns, homemade biscuits, cakes, imported rice, cornflower, plastic and rubber slippers, talcum powders, tissue paper, paper and goods made of it were all on the rise.
The price of furniture and readymade flats will also increase as the locally made hardboards and steel prices would go up. Muhbub's distant dream of owning a flat one day seems to have gone further away.
However, ambulance services, among others, have been exempted from VAT. Cooking oil, palm and soybeans, is also going to enjoy VAT waiver along with local textile, rubber, and refrigerators for the next fiscal year.
Was there everything else bad in this budget? Not actually, at least the government has thought about the employees of non-government sectors.
The government is considering to implement an integrated government-run pension framework for self-employed and employees of private organisations which Mahbub thought the government should have done years ago.