A small open economy general equilibrium model for Bangladesh has been used to numerically estimate the welfare and distributional consequences of value-added tax (VAT) and excise taxes of equal yield. The results show that poorer households are adversely affected by both uniform and proportional VAT or excises because of relative shifts and the static changes took place through demand responses in consumption. One of the central findings is that it is desirable to have 2 or 3 rate structures