Staff Reporter :
The government has decided to bring some changes in the new Value-Added Tax (VAT) and Supplementary Duty Act-2012 following strong opposition from the business community.
The revision of the new Act will be made through budgetary measures from July 1 this year.
Finance Minister AMA Muhith on Sunday came up with the indication when business leaders led by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Kazi Akram Uddin met him at his Secretariat office in the city this afternoon.
FBCCI, the country’s apex trade body, earlier voiced concerns on the law saying that the government is going to enact the new legislation without any impact assessment study. It also urged the government to bring some changes on it considering interest of the country’s businesses.
“Business leaders, at the meeting, urged the finance minister to reconsider some measures brought in the new VAT law. It response to our pleas, the minister responded to those positively and assured us to bring necessary changes in the law,” a business leader who was present at the meeting told The New Nation, asking not to be named.
He said, he (Muhith) assured us that business firms having annual turnover up to Tk 36 lakh will be entitle to pay VAT. This amount was set as the lowest ceiling for VAT payment.
The draft law had set the lowest ceiling of VAT payment at Tk 25 lakh for a business firm.
The government had initiated to formulate the new VAT law in 2012 as per the prescription of the International Monetary Fund (IMF) to secure $1.0 billion extended credit facility (ECF) from it. IMF also tagged various conditions to disburse the credit to Bangladesh.
Following this, the government had earlier announced a road map to implement the new law by July 2014. Later, it deferred the deadline to July 1 this year facing strong opposition from the business community. Such an opposition forced the government to form a body for bringing necessary changes in the proposed law. The seven member body has already held 13 meetings with the stakeholders and produced 10 recommendations for the government’s consideration.
“The recommendations were also brought to the notice of the minister at the meeting and he gave a patience hearing on them. All the recommendations will be implemented in phases by taking budgetary measures,” said the business leader, quoting Muhith. The business leaders also discussed about the multiple VAT system and fixation of sector wise VAT instead of a 15 per cent average VAT on businesses.
“We also requested the minister for adopting a business-friendly VAT law so that the businesses can pay it without any hassle and on the other hand, the government can mobilize its expected revenue from businessmen,” he noted.
Sources said, the visiting IMF team will sit for a meeting with the Finance Minister today (Monday) where they will seek a fresh road map from the government for implementing the new VAT law. Earlier, it had deferred the release of the sixth instalment of the $1.0 billion loan after the government failed to lay out a fresh roadmap for implementing the new law.
Trade bodies, including the FBCCI, have been opposing the introduction of a new VAT law passed in parliament in 2012 claiming that the NBR did not consult with the business community before enacting the law.
