March 25, 2017 - 12:48pm
Business leaders demanded 10% VAT rate for manufacturing sector while 7% for service sector
Implementation of new VAT law would be suicidal if the seven-point demand put forward by business groups is not taken into consideration, according to leading chamber representatives.
Representatives of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Metropolitan Chamber of Commerce and Industry (MCCI) and other business organisations warned that unless the government pays heed to their demand, implementation of the new VAT law would be at stake.
The chamber people said this on Thursday at a meeting with Finance Minister AMA Muhith, Commerce Minister Tofail Ahmed and National Board of Revenue (NBR) Chairman Md Nojibur Rahman in the revenue authorities under-construction headquarters at Agargaon in the capital.
The business groups have demanded sector-wise VAT rate instead of uniform 15% VAT with implementation of new VAT and Supplementary Duty Act 2012 that is scheduled to come into effect from July 1 this year.
With implementation of new VAT law passed in 2012, the existing square foot-based package VAT would be abolished.
After several deferrals on the implementation date, the government is now planning to implement the new act from July 1, 2017.
Business leaders demanded 10% VAT rate for manufacturing sector while 7% for service sector.
After the meeting, FBCCI first senior vice-president Md Shafiul Islam Mohiuddin told the Dhaka Tribune that “Implementation of the new VAT law without involving businesses will be a suicidal decision.”
When arguing on multiple VAT rates, the apex chamber leader mentioned that standard VAT rate is 10% in Laos, Cambodia, Vietnam, Afghanistan, Indonesia and Myanmar.
The rate is 8% in Iran, 12.5% in India based on states, 13% in Nepal and 12% in Sri Lanka, he said, demanding continuation of multiple VAT rate for businesses.
The FBCCI leader also said there should be no VAT on any stage of business if their annual turnover is Tk36 lakh.
“We want VAT on annual turnover at 2% if that exceeds Tk36 lakh,” he demanded.
Following the meeting, Finance Minister AMA Muhith formally inaugurated the VAT Online System, while NBR Chairman Md Nojibur Rahman chaired the event.
Addressing the function, the finance minister said: “We will pay VAT online from now.”
Commerce Minister Tofail Ahmed, President of Parliamentary Standing Committee on the Finance Ministry Dr Md Abdur Razzak, State Minister for Finance and Planning Abdul Mannan, FBCCI first senior vice-president Md Shafiul Islam Mohiuddin and MCCI President Nihad Kabir were, among others, present.