There is a confusion in the business community regarding the implementation of VAT Act 2012. What are you doing to help them?The NBR is regularly communicating with businessmen and working to resolve the issues raised by them regarding the implementation of the law. We are addressing their queries through email, social media and the call centre.
There are some issues that are frequently coming up in the queries. We are making a list of these frequently asked questions so we can work to find a sustainable solution for those issues at a later date.The law will be effective from July 1. Is the NBR prepared for it?We are prepared for the new law. The NBR officials have been trained for it and they will work at the field level to monitor the VAT collection process as well as collect it themselves.
Setting up the mechanism for the new VAT law has progressed remarkably; the online system will be complete before the deadline. Under the new law, the VAT collection will be done entirely online. After the system was officially inaugurated by Finance Minister AMA Muhith on March 23, registration has been taking place around the country and around 5,000 businesses have already registered for the online system.
People in the business community have assured us that they will cooperate with the NBR in implementing the law. We have also assured them that the implementation process will be smooth, but the business community has to maintain a positive attitude about the new system.How do you plan to ensure hassle-free VAT collection?Since we will go through a transition, there will be a committee to oversee the process, while another committee will work on risk management, if there is any.
Outside Dhaka, there will be VAT implementation assistance committees working under the division commissioners to implement the law, as per the finance minister’s directive. Meanwhile, officials under the district administrations will work at the district level.
In case of any problems, the NBR will help by providing technical support or manpower to resolve the issues.Will the law help to increase revenue contribution to the GDP?Yes. If the new law is properly implemented across the country, revenue contribution to the GDP will increase by 1.5-2%. Around the world, VAT is termed as the “money machine”; it is considered the new avenue for revenue earning.
However, in order for us to achieve that, businesses will have to act as the trustee between the consumers and the government to make sure that the VAT reaches the government.Rumour has it that implementing the flat rate of 15% under the new law would push inflation up by 1.5%. There is no scope for any inflation like that, nor would it affect the consumers significantly. Under the new law, the businesses will get rebate on the VAT based on their accounts. Since it will reduce the cost, there is no reason to increase the product prices.Will prices of utility services, such as electricity, increase?No, electricity prices will not increase under the new law as the bills will be VAT-inclusive. The authorities concerned will get rebate on the VAT; the consumers will not have to pay the VAT from their own pocket.How does the NBR plan to reduce deficit in the upcoming budget?Our prime task is to increase revenue collection and we are on the right track to achieve that target. Since the implementation of new VAT law and widening the tax net will increase revenue earning, the budget deficit will automatically come down.There is another rumour that local industries will lose protection under the new law. Is it true?The VAT law is pro-industry, and it will not adversely affect the local industries. Protection to the local industries and cash incentives to export-oriented industries will be the same as it will help to create new employment and remain competitive in the global market. The local industries pay revenue, so they will be protected.
Thursday, June 04, 2026
