Supermarket owners on Sunday demanded that the National Board of Revenue should withdraw the existing 4 per cent value-added tax on sales to help the sector grow and
create level playing field with the other shops.
At a pre-budget discussion with the NBR, the association also demanded withdrawal of customs duty and VAT on import of capital machinery including different kinds of freezer used at supermarkets.
‘The sector has been experiencing a negative growth in the current fiscal year, for the first time since 2000, because of imposition of discriminatory VAT on sales of supermarkets,’ said Kazi Enam Ahmed, vice-president of the Bangladesh Supermarket Owners Association.
Due to tax-induced higher costs, customers are unable to take full advantage of superstores such as better quality products, better environment and services and they choose to buy products in cheaper rate from ordinary shops as they do not have to pay VAT for buying products from there, he said.
The BSOA recommended the NBR to introduce package VAT based on space of supermarkets.
Enam said that supermarket business had shrunk over the last nine months after imposition of 4 per cent VAT, he said, adding that many entrepreneurs were not opening new branches of their chain shops.
On the other hand, new investment is also discouraging while some familiar superstores including Nandan and PQS have closed their business, he added.
The association said that the current annual turnover of supermarkets in the country was more than Tk 500 crore and it would hit Tk 3,000 crore by 5 years if the existing VAT was withdrawn.
Currently, more than 100 outlets of 35 companies are operating their business across the country and many others are planning to make new investment in the sector, Enam said.
As a part of the discussion for preparing the budget for 2012-2013 financial year, the NBR also discussed with Bangladesh Security Services Companies Owners Association, Taxicab Owners Association of Bangladesh, Bangladesh Association of International Recruiting Agency.
BSSCOA secretary general Shah Alam Sarker sought withdrawal of existing 15 per cent VAT and other taxes including income tax imposed on security services providing business.
BAIRA president Shahjalal Mazumder demanded that the government should issue foreign currency pass book in favour of BAIRA members as they needed foreign currency while they went abroad for demand purchase to export manpower.
NBR member Farid Uddin presided over the meeting.
-With New Age input
