Leaders of the Real Estate and Housing Association of Bangladesh on Saturday urged the government to consider reducing the rate of value-added tax stipulated in the new VAT Act, saying that uniform 15 per cent VAT rate would largely affect the housing sector.
They said that the cost of a housing project would rise by 30 per cent if 15 per cent VAT was imposed on the sales of apartment and building materials.
The Value-added Tax and Supplementary Duty Act-2012 will come into force on July 1.
Sharing their budget reactions in a city hotel, REHAB leaders said that the government imposed 15 per cent VAT even on natural sand in the proposed budget.
They said that imposing 15 per cent VAT on five raw materials — rod, cement, brick, stone and sand — would led the housing sector to destruction.
On June 1, finance minister AMA Muhith in the proposed budget for the next fiscal year (2017-18) kept the VAT rate set in the new VAT Act, claiming that the uniform VAT rate would not affect the prices of essentials.
REHAB president Alamgir Shamsul Alamin requested the government to keep the housing sector outside the purview of the new VAT Act as housing is a basic need.
He said that the real estate sector had already witnessed 80 per cent fall in sales of apartments, forcing the realtors to terminate their employees.
Alamin said that the government was losing huge revenue due to a high apartment registration fee as buyers were showing unwillingness to register their apartments with the high rate.
He said that they proposed the registration fee rate to be lowered to 7 per cent but the government increased the rate from 14 per cent to 16 per cent.
REHAB senior vice-president Nurun Nabi Chowdhury Shaon said that it would not be possible for the government to achieve its target of 7.4 per cent gross domestic product growth in the next fiscal year ignoring the housing sector.
He called on the government to consider incorporation of the demands had long been made by the REHAB in the budget to save the housing sector from destruction.
Shown said that they proposed formation of a fund of Tk 20,000 crore to provide low-interest and long-term loans to the potential apartment buyers but there was no reflection of their demand in the budget.
REHAB vice-president Liakat Ali Bhuiyan and its director Kamal Mahmud were present, among others, in the programme.
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