Low-income families demand tax relief: Research

As food prices continue to rise, low-income families in Bangladesh are demanding tax relief to sustain their livelihoods, according to a recent survey conducted by Youth Policy Network, a youth-led research organization.

The survey, carried out in March, collected responses from 1,022 individuals across various districts and urban centres. 

Respondents included rickshaw pullers, day labourers, security guards, students, and delivery workers.

An alarming 99 per cent of respondents said they had to skip meals at times due to financial constraints. Six out of every ten participants reported regularly skipping breakfast, while many others said they also had to forgo lunch or afternoon snacks.

When it comes to food choices, most families now rely on cheaper and less nutritious options such as biscuits, bananas, eggs, and parathas. The survey found that the majority of respondents earned between Tk 10,000 and Tk 15,000 per month, while a significant portion earned between Tk 5,000 and Tk 10,000.

The rising cost of living has been exacerbated by the existing Value Added Tax (VAT) on essential items. About 69 per cent of survey participants said VAT on daily necessities imposes an additional burden on their already strained incomes.

Even basic foods like biscuits have become less affordable following recent tax adjustments. Earlier this fiscal year, the government increased VAT on bakery items, biscuits, and cakes from 5 per cent to 15 per cent. Although the rate was later reduced to 7.5 per cent after public criticism, the added cost remains a concern for low-income groups who rely on such foods for affordable nutrition.

In the context of the upcoming national budget, respondents expressed clear demands: tax exemptions for low-income individuals, increased subsidies and direct assistance for essential commodities, and higher taxes on high-income groups.

Eighty-eight per cent of respondents felt that the previous national budget failed to reflect the realities of their lives.

 However, around 70 per cent said they were cautiously hopeful that the forthcoming budget might address some of their pressing needs. 

Youth Policy Network researchers recommend reducing VAT on essential food items to between 0 and 5 per cent. They argue that lowering the tax burden would help ensure basic food security for the country's most vulnerable communities.