The Consumers Association of Bangladesh on Thursday demanded withdrawal of value-added tax imposed on electricity, gas, fuel oils like diesel, kerosene and petrol, and pubic-supply water to relieve the consumers from the extra burden of tax.
The government has set 15 per cent uniform VAT on all goods and services, with some exceptions, in the VAT and Supplementary Duty Act-2012 scheduled to come into force from July 1.
At a workshop on consumers’ benefit under the VAT law, leaders of the consumers’ rights platform also sought guarantee from the National Board of Revenue that the prices of the products would not increase after the implementation of the new law.
They also wanted withdrawal of excise duty on bank account balance.
On June 1, finance minister AMA Muhith in the proposed budget for the fiscal year of 2017-18 suggested increasing excise duty to Tk 800 from the current Tk 500 if bank balance exceeds Tk 1 lakh at any time in a year.
The rate of the duty has also been increased proportionately for other amounts of bank balance.
The CAB also expressed apprehension that the implementation of the new VAT law would increase prices of many products and services.
The VAT Online Project of the NBR arranged the workshop at its office at the Institute of Diploma Engineers, Bangladesh, in Dhaka.
CAB president Ghulam Rahman said that the prices of gas, electricity, fuel and water should not be increased due to the implementation of the new VAT law.
He said, ‘We want relief as well as development but not such prosperity that will ruin our sleeps at night.’
There are apprehensions that the prices of goods would go up and the cost of living of consumers would increase if the budget proposals including imposition of VAT at 15 per cent are approved, he said.
He hoped that the government would bring necessary amendments to make the tax policy consumers-friendly before giving approval to the proposals.
‘The NBR is saying that the new law would not increase prices of goods and services but our apprehension is that the prices would increase for various reasons as flat 15 per cent VAT would be imposed on all products,’ Ghulam Rahman said.
He also said that the VAT-exemption list had been flattened with many unfamiliar and rarely used goods like pork and mule, which made acceptability of the list questionable.
Many essential goods like tea, toothpaste, soap and spices have not come under the exemption coverage, rather the NBR proposed to increase the supplementary duty on the products, he said.
‘So, how can we say that the prices of essentials will not go up?’ he questioned.
Criticising the government’s move to increase excise duty on bank balance, he said that the move would hurt the depositors as the value of deposits had declined due to the fall of interest rate and increased inflation.
The authorities are not tough on those who embezzled and looted money from banks, rather they are taking harsh measures including increasing excise duty on bank balance of depositors to recapitalise and save the banks.
CAB energy adviser M Shamsul Alam said that lower prices for universal services like electricity, gas, water and fuel oil would expedite economic activities in the country that would result in higher economic growth and employment generation.
So, the NBR should withdraw VAT on the sectors to keep the consumers’ expenditure at tolerable level for the services, he said.
In the case of electricity, VAT would be increased to 15 per cent from the current 5 per cent under the new law, which would hit the consumers, he said.
NBR chairman Md Nojibur Rahman said the Bangladesh government offered extensive VAT exemption to such products on which neighbouring India imposes 5 per cent to 12 per cent VAT.
Exemption has been given considering four issues including protection of local industries, facilitating export, helping industries competitive on the international market and employment generation, he said.
NBR member (VAT policy) Jahangir Hossain said that there was no reason for rising of price of any product, except MS rod, after the implementation of the new VAT law.
A committee is working to protect consumers’ rights in the case of electricity price after the new VAT law implementation, he said.
Electricity price would not be increased if the Power Division claims rebate under the new VAT law, he said.
NBR member and VAT Online Project director Rezaul Hasan, CAB vice-president SM Nazer Hossain and secretary general Humayun Kabir Bhuiyan spoke, among others, at the programme.
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