PM: Suspension of uniform VAT will reduce revenue collection by Tk20,000cr

The suspension of the uniform 15% VAT rate would bring down the revenue collection by Tk20,000 crore in the current fiscal year, said Prime Minister Sheikh Hasina on Thursday. “The postponement of the VAT law will result in the reduction of Tk20,000 crore of the targeted revenue as we have formulated our budget considering the new rate," she said at parliament. While formulating the budget, the government calculated everything taking into consideration the new VAT law and the revenue that would come from the mobile companies, Hasina added. However, she said the government would have to do something to recoup with the revenue loss. “We have to do something... we have to take loan from banks or cut short our development budget.” Saying there might be devastating flood in the country this year, the prime minister said: “For this, we are importing food grains and stockpiling those so that we can face any kind of calamities. People of the country must not suffer.” She made it clear that the government had taken all the steps for distributing relief material among the victims of natural calamities. “We have taken measures for the rehabilitation of the affected people.” Hasina said each and every official concerned has been assigned, and everyone knows his or her duty. “Everyone is performing their duties sincerely.” Reiterating her government's “zero tolerance” stance on militancy and terrorism, the prime minister said there would be no place for militancy in Bangladesh. She said the main aim of the government was to contain corruption, curb terrorism and ensure people's peace and security. Hasina hoped that the poverty rate would be reduced following the implementation of the new budget. “Our aim is to make the country a middle-income one by 2021 and a developed one by 2041. We believe that we can do that.” While placing his budget at parliament on June 1, Finance Minister AMA Muhith proposed imposing the flat 15% rate for value-added tax (VAT), which drew a widespread criticism from both the ruling and opposition parties in the House. Later, Prime Minister Sheikh Hasina, during her speech on the proposed budget, requested the finance minister to suspend the law for a few years. Muhith then put the law on hold for the next two years.