Finance Minister AMA Muhith yesterday stressed the need for formulation of a joint committee consisting of representatives from tax authorities and business to enforce the new VAT law that will come into effect on next July 1.
He proposed that a committee consisting of representatives from the National Board of Revenue (NBR) and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) could resolve confusions and help implement the new Value Added Tax and Supplementary Duty Act 2012.
The minister made the proposal in the wake of a huge criticism from the business community, which has long been lobbying the government high-ups to scrap the new VAT act. They argue the law was formulated ignoring their views and opinions, and it would affect the business if implemented.
Muhith made the proposal at a seminar on implementation of the new VAT act in the capital.
“There were many discussions on the new VAT act earlier, but after so many meetings, you (businesses) are now saying that it was not a good act. How is this?” Muhith posed a question.
He said the government might formulate a committee with the NBR-FBCCI representatives and can take suggestions to develop the act.
“This act will surely exist, but we will consider the suggestions from the committee members,” he said.
The apex trade body, FBCCI, has long been arguing that the businesses are in favour of reforming the current VAT Act 1991, incorporating some provisions of the new law rather than implementing a new act.
Commerce Minister Tofail Ahmed however said the new VAT act might harm the growing businesses.
“Businesses are expediting the economy of the country and they might have some grievance against the law, but we think the new law is a good one,” he said. He also said the government has to consider the situation of growing businesses.
“The big businesses and industrialists might get help from the new act. We should form a committee before enactment of the act,” he opined.
As the government made plans to implement the act, the businesses are now going against the act.
A major portion of businessmen are against the new act as the new VAT act will have no provisions for package VAT or truncated value-based VAT system.
FBCCI chairman Kazi Akram Uddin Ahmed said there is an anger among businessmen as the new act does not have any option for paying package VAT.
Akram said: “Considering the reality and the need for increasing revenues, we are ready to pay not only 15% tax, but also 40% to 50% if needed.”
“With the new act, registered VAT payers have to pay 15% VAT on the total sales which has turned the VAT into excise duties, which is not affordable for any businesses,” he said.
He also proposed to form a high-powered expert committee consisting of private sector experts nominated by the FBCCI to properly reform the new VAT act.
Presided over by NBR Chairman Md Ghulam Hussain, the programme was also attended by Food Minister Quamrul Islam, Prime Minister’s Finance Adviser Moshiur Rahman, NBR VAT member Barrister Jahangir Hossain and other high officials.