VAT hike won’t have impact on prices of essentials: Finance Adviser

Finance Adviser Salehuddin Ahmed said the increase of VAT (Value Added Tax) in various areas will not have much impact on the prices of essential commodities.

“VAT has been increased in various areas amid the growing trend in the prices of daily essentials in the country. The increase of VAT will not have much impact on the prices of goods,” he said.

The finance adviser made the remarks while replying to questions from journalists after a meeting of the Advisory Council Committee on Government Purchase on Thursday (January 2).

The Advisory Council has approved amendments to the Value Added Tax and Supplementary Duty Act. VAT is increasing on 43 products and in some cases, VAT is being imposed anew.

When asked whether this will have a negative impact on commodity prices, the finance adviser said: “It will not have much impact on the prices of goods. We have made the duty on daily essentials zero. You will notice the discount. The key indicators of inflation are rice and pulses; you know that. The prices of all the commodities that we are increasing are very less important in increasing our inflation.”

In reply to a question, Salehuddin said the government has approved the VAT hikes to bolster state earning and not to meet IMF demands.