The Bangladesh Agro-Processors' Association (BAPA) has urged the National Board of Revenue (NBR) to withdraw the increased valued-added tax and duties on processed food products and restore them to their previous rates.

The association submitted a memorandum to the NBR in this regard today.

The memorandum highlighted that BAPA's members have continued to expand export markets, now reaching 145 countries worldwide.

With the inclusion of this sector in the government's priority list, the production and export of processed agricultural products have surpassed $1 billion in annual export earnings.

The memorandum further noted a 10 percent growth in the sector over the last six months under the current government.

The BAPA projected that export earnings could reach $2 billion by 2027.

However, the association expressed its disappointment over the NBR's January 9 decision to increase VAT and supplementary duties on various products and services in the sector.

Taxes on food processing industry products like biscuits, cakes, pickles, chutney, tomato ketchup, and fruit pulps have been raised from 5 percent to 15 percent.

Supplementary duties on fruit juices and baby food increased from 10 percent to 15 percent, while flavoured drinks and electrolyte drinks saw a jump from zero to 15 percent.

Additionally, at the merchant level, VAT has increased from the previous 5 percent to 7.5 percent.

"We are very saddened by this decision of the government," BAPA said, expressing its concerns over the increased VAT and duties.

The organisation argued that imposing such a burden on processed food products would directly affect poor farmers and low-income households.

"If the increased VAT and additional duties lead to higher product prices, many people will refrain from buying these items," BAPA warned.

It added that basic breakfast items like biscuits, cakes, juices, and other processed foods could become unaffordable for ordinary consumers.