The Bangladesh Nationalist Party on Saturday demanded immediate withdrawal of value added tax and supplementary duty increased on more than 100 products.

Instead of increasing tax and duties, it called on the government to focus on reducing expenditure through eliminating unnecessary and financially unviable projects.

Fakhrul said that the government could save at least Tk 1 lakh crore in the budget by reducing expenditure.

The party also criticised the government’s recent decision to give dearness allowances to the public servants.

The interim government’s mid-year increase in VAT and duties, without addressing economic challenges or focusing on structural reforms, raises concerns as it opts for an easy way out to address the challenges for increasing revenues, putting further stress on the already shrunk purchasing capacity of people, BNP secretary general Mirza Fakhrul Islam Alamgir told a press conference held at the party chairperson’s office at Gulshan in the capital.

‘We urge the immediate withdrawal of this irresponsible imposition of indirect taxes on the general public,’ he said.

Fakhrul said that the imposition of VAT would exacerbate the current around 13 per cent inflation, further reducing household savings and increasing bank withdrawals.

He further observed that the government’s statement indicated that VAT was increased to address the current fiscal year’s budget deficit of Tk 42,000 crore as well as potential future deficit, and to meet the Tax-GDP Ratio requirement for the International Monetary Fund loan.

The BNP understood that in the aftermath of the fall of Awami fascism, the financial sector like many others plunged into chaos, leading to substantial challenges, the BNP leader also said.

Regardless of who took the charge of the country’s governance, they must approach the challenge with competence and courage, he said.

Fakhrul criticised the interim government, saying that it had failed to establish proper coordination between monetary and fiscal policies, put the disheveled market management in order, and control inflation.

‘Bangladesh Bank is raising interest rates to combat inflation, while the government is increasing taxes, which will further fuel inflation. One ministry is permitting the import of eggs, while another is restricting it. The general public is bearing the brunt of this inefficiency and lack of coordination,’ he said.

Regarding dearness allowances for government employees, the BNP secretary general stated that it would invariably fuel inflation.

‘There was no need to take these issues into consideration for now,’ he said.

Fakhrul said that if the interim government had called for early elections as the BNP had repeatedly suggested, it would have helped resolve many issues currently plaguing the state’s governance system.

‘We will continue to support the interim government, but we would also urge it to prioritise the people’s views when formulating policies,’ Fakhrul said.

He mentioned that given the current economic situation, there was an opportunity to explore alternative revenue collection methods with a focus on increasing direct taxes rather than indirect taxes.

BNP standing committee member Amir Khasru Mahmud Chowdhury said that the interim government should have distanced itself from the previous government’s looting budget and introduced an interim budget to address the country’s economic challenges.