Restaurant owners demand uniform VAT in Bangladesh

DHAKA, June 20, 2026 — The Bangladesh Restaurant Owners Association has demanded a uniform VAT rate for restaurants and catering services and the withdrawal of proposed taxes on essential goods in the national budget for fiscal year 2026-27. The association placed a seven-point charter of demands at a press conference at its central office in Dhaka's Purana Paltan on Friday.

The demands target what the group calls discrimination in the tax structure for the food service sector, which it says strains compliant businesses. Restaurants currently pay 5 percent VAT while catering services are charged 15 percent.

BROA pushes for a uniform VAT rate

The association proposed setting VAT at a flat 5 percent for both restaurants and catering services to remove the existing gap. It said the disparity creates unfair competition and complicates tax administration.

BROA also called for all food establishments, including street food vendors, to be brought under the VAT registration system. The group said the step would reduce irregular competition and raise government revenue.

Speaking at the press conference, association leaders described the present system as one of "policy discrimination" affecting restaurants, catering companies and street food vendors.

Calls to scrap proposed taxes on essentials

BROA urged the government to completely withdraw a proposed 0.5 percent source tax and a 10 percent supplementary duty on essential commodities. It argued the measures would add to consumer costs amid high inflation and weaker purchasing power.

Secretary General Imran Hassan welcomed the BNP-led government's effort to frame a business-friendly budget despite macroeconomic pressures, high inflation and banking sector volatility, the association said. He noted that rising electricity and LPG prices had pushed the restaurant industry into a deep crisis not fully addressed in the proposal.

Depreciation benefit and VAT collection cycle

The association welcomed a budget proposal granting depreciation benefits for new restaurant investments outside Dhaka, at 60 percent in the first year and 40 percent in the second, calling it supportive for new entrepreneurs. It also proposed restoring monthly VAT collection instead of a proposed three-month cycle, saying monthly compliance supports business discipline.

Regulatory relief and a harassment-free environment

BROA said restaurant operators currently need 10 to 12 approvals from different agencies, making operations costly and slow. It proposed a one-stop service and an integrated compliance framework covering licensing, monitoring and food safety, overseen by the National Board of Revenue and other bodies.

The association also called for a harassment-free business environment for the sector. The food service industry is a significant employer in Bangladesh, with hundreds of thousands of establishments operating nationwide.

Sources: Hospitalitycareerprofile.com