FBCCI for raising turnover VAT ceiling to Tk 36 lakhs
08 March 2015, Nirapad News: The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) on Sunday urged the government to raise the ceiling of turnover VAT to Tk 36 lakh from Tk 24 lakh to facilitate the growth of countrywide small and cottage industries.
FBCCI president Kazi Akram Uddin Ahmed put forward the demand when he met Finance Minister AMA Muhith at his secretariat office.
Briefing reporters after the meeting, the FBCCI president said the Finance Minister has agreed on their proposal.
A government review panel in January last suggested the revenue authority impose multiple VAT rates, instead of the universal 15 percent in all areas, to help flourish micro and small businesses and protect consumers.
The review panel for the law also suggested raising the ceiling of turnover VAT to Tk 36 lakhs from Tk 24 lakhs to facilitate growth of small and cottage industries, rural enterprises and reduce the hassles of retailers and small businesses.
The nine-member panel, headed by a former National Board of Revenue member, put forward its recommendations to Finance Minister AMA Muhith early January.
The NBR formed the committee with representatives from the business community and the government, as the apex trade body demanded review of the new law before its implementation.
The new VAT and Supplementary Duty Act 2012 is expected to come into effect from July next year. It will replace the existing VAT Act 1991, which VAT officials say suffers from distortions due to presence of various types of VAT rates.
The new law, framed at the prescription of the International Monetary Fund, will end the scope for package VAT, VAT determined on a truncated basis and tariff value system that various sectors now enjoy.
The FBCCI had earlier said the government consulted businesses when the law was being formulated but their recommendations and concerns were not reflected in the final law.
About the implementation of the multiple VAT rates, Kazi Akram Uddin Ahmed said the Finance Minister said the multiple VAT rates would be implemented, but implementation of the multiple VAT rates would not take place immediately rather it would be implemented in phases through budget.
Kazi Akram Uddin Ahmed said the Finance Minister assured him that the VAT Act would be gradually implemented in each budget from the fiscal 2015-16.
When asked whether there was any discussion over the recent political situation in the country, the FBCCI president replied in the negative.
About imposing the multiple VAT rates instead of the universal 15 percent VAT rate, the FBCCI president said the Finance Minister informed him that the multiple VAT rates would be implemented gradually so that the businesses do not face difficulties.
Asked about the prescription of the IMF against the imposition of multiple VAT rates, the FBCCI president said they tried to convince the IMF that the multiple VAT rate is in place in many countries.
Instead of imposing 15 percent VAT on all imports and supplies, the review committee proposed slapping VAT at reduced rates for the firms that are unable to take input tax credit.
The panel said such rates are present in many developed and developing countries such as France, China, Malaysia, India and Pakistan.