Stalemate over the new VAT law continued between the government and the businessmen as both the sides are adamant on their respective positions.
“15% universal VAT rate will not be changed,” said Finance Minister AMA Muhith at a workshop on the new value added tax law in Dhaka yesterday.
According to him, if the businessmen keep the accounts of value addition of their products, there should be no problem regarding value added tax.
If the value addition of a product is Tk4, the VAT will be imposed only on that Tk4, not the whole price, he explained.
“But there is a scope to have a broader discussion about the matter before the upcoming budget, and the businessmen can place their demands and arguments by this time,” finance minister, however, said.
He claimed keeping a universal VAT rate is widely practised tradition around the world.
But Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Kazi Akram Uddin Ahmed said the business people would stick to their demand of multiple VAT rates. National Board of Revenue organised the workshop on the new VAT law to make businessmen aware and educate them about the law, presided over by NBR Chairman Md Nojibur Rahman.
“The government has decided to keep the 15% VAT rate just to please the International Monetary Fund (IMF),” alleged Kazi Akram.
He said although the government has enacted the law on the basis of the IMF recommendations, the law has to be implemented considering the interests of the government and the businesses. Suggesting training for the businessmen on the subject, FBCCI chief said the business community as well as the VAT officials have to be aware about the new VAT law.
“VAT is the biggest source of revenue collection. But the business people do not have a clear idea about the VAT system.”
“I would ask the NBR to arrange seminars to educate the businessmen on it.”
Rupali Chowdhury, president of Foreign Investors’ Chamber of Commerce and Industry (FICCI), talked about the turnover ceiling for VAT in the SME sector. She said if the VAT rate remains high, it would be very tough for the small and medium enterprises to survive.
She urged the government to consider the issue for the sake of the SME sector.
In January a nine-member panel, headed by a former NBR member, put forward its recommendations on the VAT rate to Finance Minister AMA Muhith.
The panel suggested the revenue authority to impose multiple VAT rates, instead of the universal 15% in all areas.
It also recommended raising the ceiling of turnover for VAT to Tk36 lakh from Tk24 lakh to facilitate growth of small and cottage industries, especially in the rural areas.
