Muhith: People will have to pay higher tax

The finance minister has said people will have to pay higher tax from the next fiscal year. “The living standard has improved as we have been constantly maintaining a 6% growth rate over the last eight years,” AMA Muhith told at pre-budget meeting with editors of print and electronic media on Thursday. “I believe the people are now capable of paying taxes,” he said, admitting that the proposed tax incidence would affect the people. But implementation of a 15% flat VAT rate for almost all products from July 1 amid widespread criticism will push up prices of essentials, due to multi-stage payment of tax from production level to retailing. This means, living cost will also rise. Muhith said the VAT net was expected to be expanded further. He said the total revenue growth rate for next fiscal is 30% but now it stands at 17%. The National Board of Revenue (NBR) has proposed a VAT rate of 10%-12% which will be placed before Prime Minister Sheikh Hasina on May 14. It has also prepared a new tariff line of 500 products to protect the local industry. But under new VAT and supplementary duty law, supplementary duty will remain on 170 products. Under the new law, all business transactions – except education, lifesaving drugs and essential commodities – will come under VAT net. The NBR, however, is yet to clarify those exceptions. Product manufacturers will enjoy rebate by showing previous vouchers or records. Finance Minister Muhith said Bangladesh’s economic growth was one of the best in the world. A recent PricewaterhouseCoopers (PwC) report said Bangladesh's domestic output could double from $628 billion in 2016 to $1.3 trillion in 2030, making it one of the top three fastest growing economies in the world. “We will fix a 7.4% GDP growth target [for the next fiscal year] but we expect the growth to be more than 7.5%,” the minister added.