The government has decided to reduce VAT and tax rates at the import and local production levels to address the LP gas crisis and price volatility. The Ministry of Power and Energy issued a notification in this regard on Thursday.
According to the notification, it has been proposed to reduce VAT on imported LP gas from 15 percent to 10 percent and VAT on local production to 7.5 percent.
Besides, the National Board of Revenue has been requested to take necessary measures to restructure the tax structure by considering LP gas as a ‘green fuel’. At the same time, Bangladesh Bank has been instructed to simplify the process of opening bank loans and LCs for importing LP gas.
Government sources said that about 98 percent of the LP gas used in the country is imported through the private sector. During the winter season, due to reduced supply in the international market and shortage of gas in the pipeline, the demand for LP gas increased, creating a severe crisis in the market. The decision to reduce VAT is expected to normalize supply and reduce pressure on consumers.