Kazi Zahidul Hasan :
Terming the new Value Added Tax (VAT) and Supplementary Duty (SD) Act business ‘unfriendly,’ trade body leaders on Monday urged the government to make necessary review on it considering interest of the country’s trade and business.
They said, if the law is implemented, it will put negative impacts on businesses, especially small and medium ones.
The contentious VAT and SD Act 2012, which stipulates a flat 15 per cent VAT, is scheduled to take effect from July 1 next year.
“The new law seems to be unfriendly to business as it would be tough for businesses to comply with various provisions of the new law,” Abdul Matlub Ahmed, President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) told The New Nation on Monday.
He added, “It will go against the businesses and so that the business community is opposing the introduction of it since it is passed in the Parliament”.
The FBCCI leader further said that the new law will introduce a unique VAT rate at 15 per cent for all products and services which will be dealt a heavy blow to most businesses, especially small and medium ones.”Owners of small enterprises will face real trouble as they will have to pay huge taxes once the new law is introduced,” he said, adding, “The revenue board should carry out impact assessment on implementation of the new law prior to its implementation.”
Matlub Ahmed also demanded for continuation of package VAT and truncated value-based VAT at reduced rate for traders that were scrapped in the new law.
“We need a business friendly law so that businesses can flourish further and at the same time the government’s revenue collection is also improved,” he added.
The FBCCI leader also said that VAT has an impact on competitiveness of businesses, social justice and employment. So, prior to introduction of a new law, the authorities should take consideration of these ground realities.
“The government is going to introduce the new law as per the suggestion of IMF, which will not bring any good for the businesses,” Abdus Salam Murshedy, President of the Exporters Association Bangladesh (EAB) told The New Nation on Monday.
He said the new law is going to impose a flat 15 per cent VAT for all businesses which will leave huge negative impact on both manufacturers and consumers.
“If implemented, many small and medium enterprises will face closure due to heavy tax burden on them. It will ultimately affect the economic activities across the country and squeeze the opportunities of new job creation,” he added.
Murshedy said that the business community admits that the government needs money to implement big budgets, and we are also ready to give taxes. But the law was formulated in such a way that businessmen were forced to pay additional taxes making them unhappy.
The EAB leader, however, expressed the skeptical view about the implementation of the new law saying that the business community may launch protest against it as it is no digestible for them.
He also urged the government to reduce the VAT rate from the existing 15 per cent to below 10 per cent as in most countries, VAT rate is below 10 per cent.
“The VAT rate can also be reduced here considering the present state of local economy,” he added.
Murshedy said that it is unfortunate that the government and businessmen discuss the matter prior enacting the law. But their suggestions were not reflected in the proposed law.
