National VAT Day on Tuesday
National VAT Day is being observed on Tuesday across the country with the aim to build a VAT-friendly environment and increase interactions between businesses and revenue officials.
The National Board of Revenue (NBR) Chairman Md Mosharraf Hossain Bhuiyan is scheduled to inaugurate the opening ceremony of VAT Day and VAT Week at 7:30am at the NBR office in the capital.
Marking the day, VAT officials will bring out processions in the capital and other divisional headquarters early morning. Traders, VAT payers and celebrities are expected to attend the annual events.
The NBR chairman, earlier in a press conference, said payers of value added tax (VAT) would get cordial services and pay VAT in a hassle-free environment in the VAT Week.
144 firms to get VAT awards
A total of 144 business firms in different categories have been selected for awards for their highest VAT payments in 2017-18 fiscal.
Finance Minister AHM Mustafa Kamal is scheduled to hand over crests and certificates to the representatives of the firms on Tuesday at a program at Bangabandhu International Conference Centre (BICC) in the capital.
Planning Minister MA Mannan and Finance Advisor to the Prime Minister Moshiur Rahman will join as special guests, while the NBR chairman will preside over the program.
Of the 144 entities, nine businesses will get the highest VAT awards at national level and the rest 135 from district levels.
The NBR earlier announced the names of the business firms through separate gazette notifications.
According to the notifications, Square Formulations Ltd, Aristopharma Ltd and Rashidpur Condensate Fractionation Plant are the highest VAT payers at the national level in production category, while Hamco Corporation Ltd, SC Johnson Pvt Ltd and Siemens Health Care Ltd to get the awards in trade category and Chittagong Warehouse Ltd, Qatar Airways and Thai Airways in service category.
Two to three business entities were selected from district levels in production, service and trade categories.
Contribution of VAT to revenue
The government earned Tk202,312 crore in the last fiscal year (FY2018-19), in which the VAT contribution was Tk78,694 crore, or 38.89% of the total revenue, according to the NBR.
The VAT share on total NBR revenue remained at about 35% over the last couple of years, said the NBR data.
The government collects VAT from four main sources: imports, local production, wholesale, and retail sale.
Among the heads, VAT from imports contributes almost 40% of the total collection, while local trade and production contribute the rest 60%.
The revenue board chief recently said the NBR was going to introduce VAT law and working for bringing businesses under the VAT automation so that they could ease VAT collection and raise the tax income.
Mosharraf said the tax to GDP ratio was 7.23 in 1991, the year the NBR introduced the VAT, he said, adding it increased to nearly 10% now.
“The tax-GDP is still lower than other developing countries,” he said, adding that the country needed more revenue to graduate the country to upper level.
The revenue target of the current fiscal year is Tk325,600 crore, with Tk1,17,672 crore coming from VAT.