The National Board of Revenue is considering a request from Local Government Division for withdrawal of 15% value added tax on trade licence renewal fees.
In a letter recently, LGD Secretary Abdul Malek made the request to the NBR Chairman Nojibur Rahman.
Officials said if the VAT was lifted, traders would be relieved of additional financial burden.
The Ministry of Local Government, Rural Development and Cooperatives on March 2 hiked trade licence fee by an average of 263%.
The NBR also started enforcing the 15% VAT on the fees, which was imposed in 2011, but the city corporation authorities did not collect them.
As part of the enforcement, the revenue authorities demanded that the businesses should pay the VAT due for the last four years together with this year’s VAT in order to renew their trade licences.
The decision sparked protests among traders and businesses and many of them kept themselves away from renewing their trade licences due to the excessive hike announced in March this year.
In such a situation, the government formed a seven-member committee consisting of three government officials and four business leaders, headed by an additional secretary to work on rationalising the hike.
The deadline for trade licence renewal was also extended by two months till November 30 to resolve the dispute.
However, NBR officials said there was nothing they could do about the situation because the VAT was imposed four years ago but the city corporation officials did not charge it.
“It is now a matter of them. However, we are assessing the request. If the government high-up wants, the VAT may be withdrawn,” said an official.
