VAT law to have slashed rate

Finance Minister AMA Muhith on Wednesday hinted that the government would amend the new VAT act 2012 to bring down the 15% VAT flat rate to a tolerable level. “I am thinking about giving some relief. Some amendments may come,” Muhith told reporters in response to a query. The minister came up with the comment while he was replying to the queries of reporters after inaugurating a mobile VAT Online Help Desk on the National Board of Revenue (NBR) premises on Wednesday. Amid widespread criticism and opposition, the new VAT law is supposed to be effective from July 1 with 15% flat rate for almost all products. Asked about cut in VAT rate, amendment to VAT law and supplementary duty (SD) on import, the minister said: “Wait and see, it will be disclosed in the upcoming budget.” Seeking anonymity, highly credible sources at the NBR and the Finance Ministry told the Dhaka Tribune that the VAT rate is likely to be set at 12%. Although the government earlier planned to withdraw supplementary duty on many products, it has decided to retain the duty on import of many products for protection of local manufacturers. “The VAT-free limit for businesses is likely to be set at Tk50 lakh while the supplementary duty will remain on around 600 products,” said a top official of the Finance Ministry. On the proposal of businesses to keep the VAT rate at 3% to 5%, Muhith said his only comment on this is “rubbish”. In reply of the question, “You said earlier that the VAT rate will be comfortable. So what will be the VAT rate?” he said, “Yes. That’s all right. That’s enough, but the VAT rate will be disclosed in the budget.” Mentionable, the government is planning to implement the new VAT law from July 1 while businesses are opposing the 15% VAT flat rate scheme. Businessmen have already had a heated debate on the issue with the finance minister. They had also threatened to take to the streets. Muhith, at that time, replied that such protests will be quashed. The finance minister on Wednesday inaugurated a mobile VAT Online Help Desk – which is a minibus that will roam around markets and carry out online VAT registration for businessmen. Nine such vans will be launched. Of them, seven will roam around Dhaka and two around Chittagong.