In the face of strong criticism from the business community, the government on Wednesday decided to review the new Value-Added Tax and Supplementary Duty Act-2012 which are supposed to be implemented from July next year. At a seminar on the law, finance minister Abul Maal Abdul Muhith instructed the National Board of Revenue to form a joint committee to review the law in line with the demand of business community.
The law will be reformed based on the recommendations of the committee to be formed with representatives from business community and the revenue board, he said.
The revenue board organised the seminar at the Institute of Diploma Engineers to solve the crisis that emerged amid opposition of business community in implementing the new law.
NBR chairman Ghulam Hussain presided over the seminar where commerce minister Tofail Ahmed, food minister Qamrul Islam, prime minister’s economic adviser Mashiur Rahman and representatives from different trade bodies attended.
Trade bodies including the Federation of Bangladesh Chambers of Commerce and Industry 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.
The revenue board even did not carry out any impact assessment on implementation of the new law, they said, adding that the law is unimplementable as it will put negative impacts on traders, mostly small and medium ones.
They have also been demanding for continuation of package VAT and truncated value-based VAT at reduced rate for traders which was scrapped in the new law in a bid to introduce unique VAT rate at 15 per cent for all products and services.
At the seminar, they rather demanded to amend the existing VAT law instead of replacing it with a new one.
They said that the concern and demands of business community were not reflected in the new law.
They also blamed that the government framed the law following the advice of International Monetary Fund and that is why the spirit of the law went against the interest of the businessmen.
Muhith, however, rejected their demand of amending the existing law and said that the government would implement the new law after reforming it based on the recommendations of the committee.
He instructed the NBR to form the committee in which two representatives from the NBR and trade body will perform as co-chairman so that the report becomes acceptable to all.
‘We will take steps in line with the report of the committee that will work on other proposals including continuation of package VAT and truncated value-based reduced VAT of businessmen,’ he said.
He termed the new VAT law a very good one for the traders who maintain their accounts properly.
Tofail Ahmed said that the present crisis emerged as the draft of the law was prepared by the foreign consultants of the IMF.
He said that the new law would harm the rising businessmen though there was nothing wrong for established businessmen.
The NBR should properly examine the demands of business community so that they are not affected due to the law, he said.
At the meeting, FBCCI president Kazi Akram Uddin Ahmed said that they raised all these concerns in 2009 and later on at the meeting with the NBR, parliamentary standing committee and at the meetings of task-force headed by prime minister’s economic affairs adviser Mashiur Rahman.
If the government would include the issues on which the FBCCI, NBR, task-force and parliamentary standing committee agreed, all problems would be solved, he said.
He proposed for forming a committee for reducing the gap over the issues regarding the implementation of the law.
NBR member (VAT policy) Jahangir Hossain made a presentation on good features of the new law.
Officials of the revenue board said that they had already sought time extension up to one year for implementation of the law as they were not prepared to implement it from July 2015.
The revenue board will have to introduce online system for registration and VAT payment before implementation of the law, but it will not be able to do it by this time, they said.
Food minister Qamrul Islam, prime minsiter’s economic adviser Mashiur Rahman, FBCCI former president Annisul Huq, first vice-president Jashim Uddin, Bangladesh Garment Manufacturers and Exporters Association president Atiqul Islam, Bangladesh Dokan Malik Samity chairman SA Kader Kiron, among others, spoke at the saminar.
-With New Age input
