International Monetary Fund has reiterated its dissatisfaction over the delay to make new value added tax law effective from July this year, said official sources.
With the launch of Vat automation system in July, the law was supposed to be implemented from the month which also marks the beginning of next financial year.
But the government has already canlcelled tender for Vat automation works over allegations of irregularity in the process, raising the concern about the launch in due time.
IMF came up with the dissatisfaction at an initial meeting on government reforms committee at Finance Division’s office in Dhaka yesterday.
The meeting discussed full-filling of mainly two conditions for Extended Credit Facility (ECF), which include implementation new Vat law, said a Finance Division who attended the meeting.
Earlier, the government promised to the IMF to implement the law from middle of 2015.
Besides, the government also failed to appoint a foreign audit firm to evaluate financial status of the country’s lone fuel oil importer Bangladesh Petroleum Corporation. This was one of two main conditions set under the ECF programme.
The official said IMF’s note of dissatisfaction would be presented for discussion at the next week’s meeting of the government reforms committee. Finance Minister AMA Muhith will preside over the meeting. The reforms committee is dealing with the matters like implementation of new Vat law.
Two tranches of IMF fund of around $280m under the ECF now hang in the balance as some conditions still remain unmet.
Finance Division officials said BPC selected a local auditor to assess its financial status and prepare an annual report, but the global lender preferred an international audit firm.
On September 23 last year, regarding Vat reforms, Muhith said the government would not be able to complete Vat reforms programme by June 2015. He said it might be delayed to June 2016.
“But I am not sure whether IMF will agree with me,” he said.