Representatives from different service-oriented sectors have urged the National Board of Revenue (NBR) to reduce the existing Value Added Tax (VAT) rate of 15% in between 4.5% and 7%.
The NBR should also take necessary initiative to prevent misuse of bonded warehouse facilities that is creating around 58,000 crore revenue loss annually, they said at a pre-budget meeting held at the NBR headquarters in the city yesterday. NBR Chairman Md Nojibur Rahman presided over the meeting.
“The revenue authorities should impose VAT only on value additions instead of total amount that the business charge from the consumers for providing services,” they added.
The business came up with the call at a time when the government is at the final stage for introducing a new Value Added Tax and Supplementary Duty Act-2012 which will have no provisions for package VAT or truncated value-based VAT system.
With introduction of the law, which will come into effect from July 1, 2016, all levels of business have to pay a unique and a flat VAT rate at 15%.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Abdul Matlub Ahmad said: “Businesses want equity and level playing field while doing their business.”
He suggested that the revenue authorities to set the VAT rates from 4.5% to 7% to help collection of VAT easily from the traders.
Terming the implementation of new VAT law as challenging, he stressed the need for simplification of paper-related procedures to help businesses come forward to pay revenue.
Currently, 9% of the business out of around 64,000 registered VAT entities pay VAT in the country, which can be raised to one lakh easily, he opined.
Courier Service Owners Association, Bangladesh On-Board Courier Service Association, and Money Changers Association of Bangladesh urged the NBR to reduce the VAT rate on their sectors from existing 15% to 4.5%.
To attract foreign tourists in Bangladesh, Hasib Ahmed, director (finance) of Pan Pacific Sonargaon Dhaka, urged the revenue authorities to reduce VAT rate from 15% to 7% on the hotels, as like other tourist countries-Singapore, Malaysia and Thailand.
Bangladesh Mudran Shilpa Samity President Shaheed Serniabat said: “Local printers are facing troubles in participating in tenders for publication of the textbooks as they have to pay 61% duties on import of paper while the Indian bidders can submit the international tender and do the task without paying any duty as per agreements of World Trade Organisation.”
“We want zero duty on import of raw materials required for printing of government publications, especially the textbooks,” he said.
Hafizur Rahman of Tour Operators Association of Bangladesh requested the NBR to allow its member in import of tax-free vehicle and vessels which can only be used to carry tourists in the country.
“The business failed to do businesses in 2012, 2013 and 2015 due to political turmoil situation,” he also said demanding tax holiday on the income of tour operators for next few years to make the sector vibrant.
Bangladesh Restaurant Owners Association General Secretary Rezaul Karim Sarker Rabin also requested the NBR to introduce nit 3% VAT for small restaurants.
He also asked the NBR to introduce 4.5% VAT for sweetmeat shops across the country, except those in Dhaka and Chittagong.
Regarding mandatory use of Electronic Cash Register (ECR), machine by traders, he also opined that most of the cash managers of small restaurants cannot operate ECR machine and therefore the NBR should exempt small restaurants from obligations from using ECR.
Tofayel Khan of Bangladesh Textbook Printing and Marketing Association urged the NBR to prevent misuse of bonded warehouse facility to prevent revenue leakage and rescue printers from buying papers on high rates from the actual rates.
Bangladesh Paper Importers Association General Secretary Alamgir Haque demanded the NBR to stop misuse of bonded warehouse facility by introducing duty draw back facility in the country.
Haque also urged the authorities to set 5% import duty on papers and paper boards that are imported for different sectors including pharmaceuticals, food processing industries, IT industries and other small cottage industries etc.
Bangladesh Gyan O Srijanshil Prokashon Samiti, a platform of book publishers, sought income tax waiver on donations made for libraries.
With his concluding remark, FBCCI President Abdul Matlub Ahmed asked NBR to take support from its 480 line associations for training the traders on ECR uses across the country.
NBR chairman Md Nojibur Rahman has urged the businesses to help in revenue collection.
Representatives from Advertising Agencies Association of Bangladesh, Bangladesh Dress Makers Association, Tourism Developer Association of Bangladesh, Tourism Resort Industries Association of Bangladesh, Bangladesh Security Services Companies Owners Association also placed their demands at the meeting.
