The National Board of Revenue has completed all necessary preparations to retain the existing value-added tax law amid the government’s decision to postpone the new VAT law, officials said.
They said that implementation of the new VAT and Supplementary Duty-Act 2012 from July 1 might be deferred for one or two years in the face of strong resistance from business community and fear of hike in prices of many essential commodities.
The formal announcement regarding postponement of the new law or continuation with the existing VAT Act framed in 1991 may come before the finance bill is approved in parliament on June 29.
Finance minister AMA Muhith in the proposed budget for the fiscal year 2017-2018 declared implementation of the law imposing 15 per cent VAT on almost all goods and services.
The revenue board also issued several statutory regulatory orders cancelling all the SROs under the existing VAT law and enforcing the new law from July 1.
Lawmakers from the ruling Awami League criticised Muhith over the new VAT measures saying that the measures will raise prices of many essential commodities and services including MS products, electricity, spices and locally produced clothes.
Officials said that the VAT wing of the NBR had already drafted SROs to maintain the 1991 VAT law and cancel the SROs related to the 2012 VAT law.
Vetting of some SROs including one on increasing the multiple rates of VAT under the current law and other changes has been completed by the law ministry on Wednesday, they said.
Currently, there are several multiple VAT rates ranging from 1.5 per cent to 15 per cent in the existing law.
The rates will be increased to boost revenue collection to achieve the largest target in VAT collection, they said.
Measures related to automation of the VAT system including mandatory use of electronically generated business identification number, known as VAT registration number, options for online submission of VAT returns and online VAT returns processing will be incorporated in the existing law.
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