The Federation of Bangladesh Chambers of Commerce and Industry has opposed some of the provisions of the new Value-Added Tax and Supplementary Duty Act-2012 terming
the law as regressive to business community.
The FBCCI, the apex trade body, has also blamed the National Board of Revenue for finalising the law under the influence of the International Monetary Fund and for not considering the recommendations placed by the business community.
‘Introduction of single VAT rate of 15 per cent at all levels of business and service is totally illogical and businessmen from many sectors can not afford VAT at 15 per cent,’ FBCCI adviser Manzur Ahmed said at a recent meeting with the NBR.
The NBR also withdrew package VAT system and brought all small businesses under unique VAT at 15 per cent and it is unfortunate for the business people, he said.
The FBCCI recommended the revenue board for continuation of truncated value-based and package VAT scheme considering the economic structure of the country.
Manzur said many countries across the world had truncated value-based or multiple layer VAT structure.
He said the FBCCI was preparing a detail recommendation for amending the law and also demanded a tripartite meeting among the NBR, FBCCI and IMF on the issue.
The NBR officials, however, denied FBCCI’s allegation and said that that the VAT act was enacted by the parliament after going through a long consultation process with the stakeholders.
So, only the parliament can bring any change in the law as the government high-ups excluded the recommendations of the business community, they said.
The law will be implemented from July 2015 and the NBR has already stated preparatory works including automation of the VAT management for proper implementation of the law.
NBR chairman Ghulam Hussain assured the FBCCI about holding a tripartite meeting among the NBR, IMF and FBCCI.
Currently, the rate of VAT is 15 per cent in the country but the NBR follows truncated value-based VAT system with different rates based on tariff value, fixed price and reduced base-price.
Currently 21 sectors of businesses and services including restaurant business, furniture business, land developer, distributor of electricity, transport services and ICT-enabled services enjoy truncated VAT rates.
Some small businesses in retails level in the metropolitan and municipal areas pay package VAT at different amount ranging from Tk 2,700 to Tk 9,000.
The FBCCI officials said that many businesses trading and industrial enterprises could not earn net profit at 15 per cent and from this point of view, they proposed for continuation of truncated VAT and package VAT system in matching with nature of businesses.
-with New Age input
