Leaders of Bangladesh Supermarket Owners' Association on Sunday requested the National board of Revenue (NBR) to introduce square-foot based ‘package vat’ for all the supermarkets after removing the existing 4% value added tax (VAT).
The existing VAT system is discriminatory and hampering growth of the supermarkets as other shops pay VAT at a flat rate, they argued at a pre-budget meeting at the NBR headquarters in Dhaka. NBR member Farid Uddin chaired the meeting.
Zakir Hossain, general secretary of BSOA, said that the growth of supermarket are being hampered due to the 105% duty being imposed on capital machineries used for the supermarkets, making it uncompetitive with the small local shops.
He said the supermarket owners have to pay highest tax in importing capital machineries while other countries in the region are paying less than 15% and in India it is zero.
“This punitive duty is a key reason why this vital sector cannot achieve growth as compared to neighboring countries,” said the association leader. “We are requesting NBR to initiate a unified standard which can increase the revenue of the government and help expand the industry.”
Cab Association of Bangladesh (CAB) president Khandaker M Azad urged the NBR to reduce the import tax on taxi cab to 5% from existing 20%.
“We are unable to pay VAT since the rate is very high for us. NBR could introduce a system to collect the VAT annually.”
He also requested NBR to introduce VAT exemption facility for 1480 CC taxi cab.
As per statutory regulatory order for importing taxi, importers will enjoy VAT exemption facility with taxi cabs comprising 1501-2000 CC.
Representatives of Bangladesh Association of International Recruiting Agencies (BAIRA) said that all association members are paying income tax on behalf of their respective organisations, but NBR set a rule that the association will also have to pay income tax, which is discriminatory.
“Since our association does not have income, we are unable to pay income tax for the association. We request NBR to remove this rule,” he said.
In response, NBR member Farid Uddin said that NBR imposed source tax on income of the associations.
“You do not have to pay any tax for contributions paid by the association members. Source tax will only be imposed on the association’s income like savings of the organisations at bank, rents generated from the association building etc,” he said.
Security Service Owners Association representatives requested NBR to set full exemption of VAT instead of existing 15%.
Bangladesh Thikadar Samity representative said that as per NBR rule, contractors, who have property pricing more than 10 million have to pay 10% additional income tax. He requested NBR to set full exemption of additional tax for such properties.
In response, NBR member Farid Uddin said the rule has been changed and as per the new rule, the contractors have to pay 10% additional tax if he/she has property more than 20 million.
On the same day, NBR held a meeting with Bangladesh Textile Mills Association leaders chaired by NBR Chairman Ghulam Hossain.
To facilitate the country’s textile sector, BMTA leaders demanded reduction of income tax by 5% for the sector.
BMTA president Jahangir Al Amin said the financial capability of the country’s textile sector has shrunk due to the current global economic recession.
He urged the authorities concerned to reduce the rate of income tax to 10% up to 2018 from existing 15%. He also requested NBR to put off source tax from the sector in the coming budget.
‘Since textile sector is not enjoying tax holiday benefits, investment in the sector has became stalled. To inspire and patronise foreign direct investment, we propose NBR to initiate tax holiday facility till 2018,” he said.
He also suggested constituting a fund to upgrade the country’s textile technology institute.
To compete with the other countries, it is necessary to increase the rate of alternative cash intensive from 5% to 15% for the country’s textile sectors, Jahangir recommended.