Tobacco, Luxury Items: Govt mulls over ‘Covid-19 tax’
The government may introduce a coronavirus tax on tobacco products and several luxury goods while giving tax cuts to internet services.
The measures are aimed at making the internet cheaper and curbing tobacco use during the Covid-19 outbreak, finance ministry officials said.
"Internet services provided by broadband and mobile data are now crucial for running the administration, keeping the students engaged and socialising," a top official of the finance ministry told The Daily Star.
The announcements might appear in the next budget speech in the parliament by Finance Minister AHM Mustafa Kamal on June 11.
Ministry officials said they asked the National Board of Revenue to find out ways for imposing the coronavirus tax and reducing the burden on internet use.
Cars, air-conditioners, cosmetics, perfumes, bathtubs, jacuzzis, and other, mostly imported, luxury goods will be costlier, they said.
"It is sure that revenue collection in Bangladesh will be dealt a major blow due to fewer economic activities. We need to find ways to increase revenue collection," one official said.
The tax on tobacco is considered because of its harmful effects on health, which is more serious during the pandemic of a respiratory virus.
Officials are also considering whether to raise the income tax for those who earn over Tk 5 crore a year.
The economy is witnessing an unprecedented shock due to the Covid-19 outbreak and the subsequent shutdown enforced on March 26.
The government announced a Tk 95,619 crore stimulus package for vulnerable groups, garment industries, government officials and frontline health workers in the wake of the crisis.
India's capital city imposed a 70 percent tax on retail liquor purchases from Tuesday, to deter large gatherings at the stores after a six-week lockdown.
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