The finance bill for the 2017-18 fiscal year, which is scheduled for passage at Bangladesh Jatiya Sangsad on Wednesday, may appear with some major changes including the postponement of the implementation of new VAT law that imposes 15% uniform VAT rate.
Finance Minister AMA Muhith placed the budget for the upcoming fiscal year on June 1, but many of the provisions, including the 15% uniform VAT rate and hike in excise duty on bank account transactions, drew heavy criticism from numerous parties.
In the wake of the scathing criticism, the government may change its stance on some provisions. The finance minister, the prime minister and the leader of the opposition are slated to speak on the budget in parliament on Wednesday. Here are some major revisions which may be made:
New VAT law postponed
Amid huge protest from business people, the new Value-Added Tax (VAT) and Supplementary Duty Act 2012, that imposes 15% uniform VAT rate on almost all products and services, may not come into effect from July 1.Existing VAT law update
As an alternative, the government may bring some changes in the existing Value-Added Tax Act 1991.Excise duty on bank account at old rate
The excise duty on bank account transactions might be changed back to its previous rate of Tk500 for deposits between Tk1 lakh and Tk10 lakh. The budget had earlier proposed the excise duty be raised to Tk800.No VAT on health, energy and electricity
VAT on health sector, energy and electricity bills and sale of some agricultural machinery may see complete withdrawal.Import duty on raw materials
If the new VAT law is not implemented, the government stands to lose Tk17,000 crore in revenue. To meet the deficit, the government may impose import duties on raw materials and supplementary and extraordinary duties on different imported products.
