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Bangladesh tax reform stalls amid tough opposition

Unlike India, Dhaka fails to implement major changes, putting pressure on finances

Customers at the Panthapath, Dhaka, outlet of Shwapno, a chain superstore owned by leading conglomerate ACI Group. (Photo by A.Z.M Anas)

DHAKA -- On the day that neighboring India launched its biggest tax reform in 70 years, the stage was set for Bangladesh to do the same, introducing a new value added tax system.

But in the face of strong opposition from business and political lobbyists, Dhaka pushed back the revamp for a third time, creating a substantial hole in its budget which the country may struggle to fill. The deferment by two years leaves the fate of the VAT reforms in the hands of the next government, as Bangladesh will hold a general election in late 2018.

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