‘Rise in tax to fuel prices of construction materials’

Realtors today said the cost of various raw materials, including rod and lift, will increase in the next fiscal year because of the increase in value added tax and customs tariff.

The National Board of Revenue (NBR) proposed raising the indirect tax by Tk 200 per tonne at the manufacturing stage of billet and rod.

Following the spike, the rate of VAT on the manufacturing of billet will increase 20 percent to Tk 1,200 per tonne from Tk 1,000.

As a result, prices of rod will increase affecting the home builders, said Alamgir Shamsul Alamin, president of the Real Estate and Housing Association of Bangladesh (REHAB).

He spoke at a press conference at Pan Pacific Sonargaon in Dhaka when the association shared their budget reactions.

Also, the NBR hiked import tariff for lift by 19 percent for the next fiscal year 2022-23 apart from hiking customs duty for cable, tubes plates and aluminium foil, which realtors said will further fuel the prices of homes.

The concern comes as the construction cost of under construction and new buildings has gone up by Tk 500 per square foot.

REHAB said home buyers will have to pay additional Tk 1,000 for per square foot area.

The realtors also demanded continuation of unquestioned amnesty for black money in properties for the next fiscal year.

The finance minister, in his latest budget speech, did not propose to continue the amnesty for black money in the sector.

Tk 20,600 crore was whitened in 2020-21 fiscal year and the amount would rise to Tk 50,000 crore if the government continue the amnesty for black money, said Alamin.

The association believes the sector will be able to play a fruitful role in the government's revenue earnings if its demands are met, he said.

The country will be able to reach the growth target for gross domestic product if the manufacturing sector, including the housing sector, remains dynamic, he said.