The government is in a ‘critical’ position as the suspension of 15 cent uniform rate of value added tax would cause Tk 20,000 crore shortfall from the outset of the new fiscal year.
Finance minister AMA Muhith on Wednesday gave the disclosure after a meeting of the cabinet committee on national purchases at the secretariat.
The additional income of Tk 20,000 crore projected to be generated from VAT in the current fiscal year would not be possible, he said while talking to reporters.
Lower than projected revenue generation and its way-outs have kept the national board of revenue officials busy at the onset of the fiscal year because of major changes in the fiscal measures announced on June 1 in parliament.
The changes included suspension of 15 per cent uniform rate of VAT while passing the Finance Bill 2017 in parliament on June 28 because of non-cooperation by the business communities.
Banking on the full implementation of the VAT and Supplementary Duty Law 2012, Muhith projected an ambitious revenue generation target of Tk 2,87,990 crore in the new fiscal year.
He noted that making up the revenue shortfall would be very critical for the government.
He, however, said he was holding meetings with the revenue officials to prepare an alternative plan against the backdrop of suspending the full implementation of the VAT and Supplementary Duty Law 2012.
According to the finance ministry officials, changes made in the original budgetary proposal of the current fiscal year are unprecedented.
In 2005, the government had changed duty structure of 3,000 imported products one-and-a-half months into the fiscal year 2005-06.
Responding to a query whether alternative plans would be placed in parliament, he expressed his ignorance.
He said he would discuss with the law minister soon to be sure whether the alternative plan would be placed in parliament or not.
The finance minister said he would give statements about the alternative plan before the end of the current parliamentary session.
Commenting on a question that 23 BB officials are involved in the Bangladesh Bank reserve heist in February 2016 by suspected hackers, Muhith said he did not know anything about such report from any local intelligence agency.
Commenting on another question about compensating the victims of July 1, 2016 extremist attack on a Gulshan café in Dhaka, the finance minister said that he had already allocated fund for the purposes.
Each of the 20 victims would be given Euro 15,000, said home minister Asaduzzaman on Sunday.
The money would be given to the families of the victims, he said.
Nine Italians, seven Japanese, three Bangladeshis and an Indian were killed in the attack on Holey Artisan café.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Tax