February 28, 2017 - 5:46pm
International Monetary Fund urged Bangladesh government to be careful so the implementation of new value-added tax law is delayed further, said Finance Minister AMA Muhith.
The law was supposed to be effective from the fiscal year 2016-17, but it was later deferred to next fiscal year due to opposition from the business community. The business has taken stand against the 15% flat rate set in the new law.
The law is now set to come into effect from July 1.
“IMF urged the government to be cautious with the implementation of the new VAT law set to be effective from July 1,” Finance Ministe AMA Muhith told journalists on Monday.
He was talking to journalists after a meeting with the visiting IMF delegation at the ministry’s office.
A high profile IMF delegation included Deputy Managing Director of IMF Mitsuhiro Furusawa and Executive Director Subir V Gokarn.
The new VAT law is one of the IMF conditions under the Extended Credit Facility programme.
Muhith said a committee of the National Board of Revenue was currently working with businessmen regarding execution of the new VAT.
“We will make a decision on the execution of the VAT after the committee submits its report,” said the finance minister.
He said the government already provided different facilities to businessmen which should ease the burden of the VAT.
The new law, under the controversial Value Added Tax and Supplementary Duty Act 2012, has drawn widespread criticism as it will impose a flat 15% VAT for all sectors and emphasise proper account keeping of transactions at every stage of supply of goods and services by both manufacturers and service providers.
Last week, the Federation of Bangladesh Chambers of Commerce and Industry warned the NBR that implementation of the new VAT law would be hampered if the unsettled disputes related to VAT measures were not immediately solved.
Discussion between the NBR and the FBCCI for preparing national budget for the FY2017-18 will also be hampered over the issue, the country’s top trade body cautioned.