Besides, the exchequer hopes to earn Tk80crore from television program producing businesses and Tk2crore from astrologers and marriage media services
National Board of Revenue (NBR) is going to earn Tk2,092 crore in upcoming fiscal 2019-20 by withdrawing value added tax (VAT) exemptions for seven sectors, which were enjoying the exemption till ongoing fiscal.
The revenue board has estimated Tk1,000crore only from telecom machinery import, while it eyes Tk800crore from edible oil including soybean, palm or other vegetable oils production, Tk10crore from mustered oil productions, Tk100crore form aluminium, aluminium goods and Tk100crore from plastic goods.
Besides, the exchequer hopes to earn Tk80crore from television program producing businesses and Tk2crore from astrologers and marriage media services.
The draft budget for upcoming fiscal proposes 15% VAT on telecom machinery imports, 5% for mustered oil production, 15 for other edible oils production, and 15% for marriage media and astrologers.
On the other hand, NBR will loss Tk160crore, giving VAT exemption for three new sectors —bread productions, agriculture machinery productions, showroom rent operated by women entrepreneurs.
An NBR senior official, seeking anonymity, said the government withdrew the exemption as it found the sectors to have now become solvent.
NBR still kept a huge number of products under exemption facility, the withdrawal of which would boost VAT revenue generation, he added.
He, however, claimed that VAT exemption facility was usually provided for a particular period to promote a sector or keep the product prices affordable but sometime giant businesspeople influenced the policymakers to keep the privilege in their favour.
The government is going to implement VAT and Supplementary Duty Act, 2012 from the July 1, seven years from its enactment, meeting some demands, including multiple rates, of business communities, who thwarted the implementation of the law for several times earlier.
Finance Minister AHM Mustafa Kamal, in budget speech, said some VAT exemption would continue in the upcoming fiscal.
“I am proposing to continue the existing VAT exemption facility in the case of government's priority and fast track projects, such as the Bangladesh Economic Zone (BEZA) and the Public-Private Partnership (PPP) projects.
"In addition, I am also proposing to continue the existing VAT and supplementary duty exemptions for heavy industries like automobiles, refrigerators, freezers, air conditioners, motorcycles, mobile industries, etc for the growth and development of heavy domestic industry and export sector," he said.
According to Finance Bill 2019, a total of 98 products and 42 services will enjoy VAT exemption facility in the upcoming fiscal.
The products includes essential commodities like rice, vegetables, animals while service includes basic needs like medical services, education and other social and cultural services.
Another NBR senior official said that they lost about Tk15,000 crore in the outgoing fiscal to end on June 30 for the VAT exemptions, which caused a huge revenue shortfall in VAT collection.
The NBR counted huge loss for giving exemption to some large businesses like LNG import and other gas imports, capital machinery imports for the government projects and mobile internet.
VAT is the biggest source of revenue for the NBR, followed by income tax and customs. NBR has to collect a total of Tk325,600 crore revenue in next fiscal, while target from VAT is Tk117,672 crore.