We believe it is a highly critical issue, because the government needs revenue to run the business of the state but any additional tax that impact the growth of small and medium business on the other hand is bound to be counter-productive by slowing down business to slow down income and employment. Naturally there is a need for balancing and it needs inclusive consultation of NBR with Byabosayee Oikkya Forum leaders. We believe it may be the best way to resolve the issue through dialogue. The FBCCI, the apex body of the business organizations and NBR may sit and sort out the matters.
It is noted that they have already held several meetings in presence of Finance Minister over the VAT package but a common ground is yet to be worked out. As the wholesalers and retailers dominate the supply chain of goods, strike at this level will seriously backfire disrupting business. Parties must take initiative again to sit and find out an amicable solution of the problem.
It is noted that the government in the present budget increased the VAT package to Tk 28,000 from Tk 14,000 earlier for businesses having annual turnover below Tk 80 lakh, but it is unrealistic in view of poor business turnover of a small shop in Dhaka city with high cost of living, inflation and other cost of doing business. VAT is ultimately borne by consumers and if there is danger that traders may pass the additional burden on the ordinary consumers having ramifications in their buying power. Traders questions about the quality of spending of public money is also a valid issue. In many cases the tax money is spoiled, misused, misappropriated, as corruption is rampant at every level of the government. Bureaucrats live luxurious life while the poor pay.
It is no secret that the condition of small and medium business is precarious at the moment because of poor law and order condition and long-term business uncertainty. Many have to shut the business early hours in the evening for safety. Formal sector business is losing ground to corrupt informal business. Honest people are losing ground while dishonest are taking over. We must say small and medium business must pay but care must be taken also that they are not overloaded.
