• Thursday, Jan 30, 2020
  • Last Update : 01:30 am

Reduced trade licence renewal fees need to be paid by this month

  • Published at 06:55 pm February 3rd, 2016

Businesses and traders will have to pay trade licence renewal fees by this month with an average 70% hike in line with the revised city corporation tax schedule published recently.

The sector-wise fee hike now ranges from 40% to 110%, according to the schedule issued by the the Ministry of Local Government, Rural Development and Cooperatives on January 28. The schedule has new trade license renewal rates for 299 business sectors in which changes were made in all sectors except one.

The business community finds the new rates “rational and acceptable as it was finalised in consultation with the business community.”

The business leaders said the new rates finally ended the long standing dispute between the government and business community over the steep fee hike.

The dispute over the trade licence renewal fee hike began when the the local government ministry issued a gazette on March 2 last year increasing the fee by an average of 263%.

The decision sparked protests among traders and businesses and many of them kept themselves away from renewing their trade licences.

Leading business bodies including Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Dhaka Chamber of Commerce and Industry (DCCI) and Bangladesh Dokan Malik Samity protested the decision.

The businesses also started refraining themselves from renewing their trade licence as they said the fee hike would adversely affect entrepreneurship, particularly small and medium enterprises.

In such a situation, the government formed a seven-member committee consisting of three government officials and four business leaders to rationalise the hike, which comes to around 400%-500% for small and medium entrepreneurs.

Although the original deadline for renewing trade licences ends on September 30 last year, the government extended thrice to resolve the matter and the last extension was until January 31.

“We are ready to pay the new trade licence renewal fee as it was made in consultation with the business community. Earlier, the fee hike was excessive ranging from 200% to 3,200%. Now the new rates are ranging from 40% to 110%, which is acceptable for us,” said Bangladesh Dokan Malik Samity President SA Quader Kiron.

He said they found the 70% average fee hike rational as the renewal rates did not see any rise since 2002.

“Already 50% of the businesses have paid trade licence fee at higher rate as part of the requirement in business procedures. However, the paid amount will be adjusted with next year’s payment of the fee,” Kiron added.

Meanwhile, the FBCCI thanked the government for reducing fee to a rational level.

However, the dispute over payment of 15% value added tax on trade licence renewal fee is yet to to be resolved.

The National Board of Revenue said although the businesses had been required to pay 15% Vat on trade licence renewal fee since 2011, the city corporation authorities did not collect the tax.

The NBR now wants the businesses pay the Vat that has been due for last four years and this year’s Vat to renew their licences.

In such a situation, the LGD Secretary Abdul Malek requested the NBR to withdraw 15% Vat on trade licence renewal fee as such tax came as an additional financial burden for them. He also told the revenue authorities that the city corporations would not be able to collect Vat from traders.

Officials said the NBR was yet to respond to the proposal. They said the revenue board is in principle against the proposal.