THE government has increased trade license fees by up to 263 percent from Tk 3,000 to Tk 6,900 based on category of business in the current budget, in addition to levying 15 percent VAT that a person is required to pay even before he can start a business. The trade license fees were Tk 800 to Tk 1000 up to June this year and it was suddenly surged to the present level showing the unprecedented rise in a single occasion. News report in a national daily on Wednesday said chamber bodies and trade associations have turned down the new levies immediately after the budget announcement was made demanding withdrawal of VAT and reduction of the trade license fees. They argued that the new rates are irrational and unjustified by any reason, because the government can’t do anything at will which is not both business friendly and affordable to any one planning to set up new business, particularly small business, fighting back socio-political risks.
A delegation of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) placed the demands again to the secretary of local government division on Tuesday asking him to withdraw VAT on trade license and reduce the trade license fees at a rational level. Mentionably; local government division of the LGED ministry controls the trade licensing although the NBR and the Ministry of Finance behold the authority to bring any change.
What the business community fears is that the VAT and high license fees will rather shrink the business environment and it is also contrary to the government’s own declared policy to keep the cost of doing business as low as possible to encourage more investments. Such investments are not enough forthcoming due to uncertain political factors but the government wants to achieve it to generate more jobs and income for the people. But the new tax rates are clearly self-defeating and highly arbitrary; which the Finance Minister has imposed defying the views of the chamber bodies and trade associations; which represent the interest of business.
In our view there is still time that the VAT and tax policy of the government in some cases and utility charges may be reviewed to make them people friendly instead of serving the vested interest groups.
