TOAB demands continuation of existing VAT exemption

The Tour Operators Association of Bangladesh (TOAB) on Tuesday called on the government to keep the existing VAT exemptions for travel service providers in the fiscal year starting next month (FY2025), instead of withdrawing the facility.

As per the proposed national budget for the upcoming fiscal year, the VAT exemption facility is to be withdrawn.

TOAB came up with the demand at a press conference held at the Nasrul Hamid Auditorium, Dhaka Reporters Unity (DRU).

TOAB President Md Rafeuzzaman, also the chairman of the FBBCI Travel, Tour and Hospitality Standing Committee, demanded the continuation of the existing VAT benefits for further developing the tourism industry.

Rafeuzzaman said VAT is applicable on hotel room rents, transport tickets, restaurant meal bills, tickets for enjoying various tourist attractions and amusement parks as well as other tourism services.

He pointed out that if the VAT exemptions for these elements are withdrawn, travel package prices would increase significantly, discouraging travelers and cutting business earnings.

“As a result, the entire tourism industry, especially inbound and domestic tourism, will be severely affected,” he added.

He also mentioned that the tourism industry can both earn and save hard-earned foreign currencies by a attracting domestic and foreign travelers, and thus turmoil in the industry would ultimately hurt the central bank’s forex reserves.

TOAB will submit a memorandum to the finance, civil aviation and tourism ministers soon asking them to keep the existing 15% VAT exemption on tour services, Rafeuzzaman told the reporters.

Immediately after the budget announcement, a delegation led by the TOAB president met FBCCI President Mahbubul Alam to discuss the proposed withdrawal of VAT on tour service operators.

TOAB Vice President Anwar Hossain, directors, advisors, and members, among others, were present at Tuesday’s press conference.