NBR seeks FBCCI coop in turnover and package VAT collection

Jasim Uddin | Published: 21:45, May 30,2018 | Updated: 22:40, May 30,2018

 
 

A file photo shows traders displaying apparel products to customers at a shop in Dhaka. The National Board of Revenue has sought cooperation from the Federation of Bangladesh Chambers of Commerce and Industry in collecting turnover and package value-added tax from businesses, particularly from small and medium traders. — Focusbangla photo

The National Board of Revenue has sought cooperation from the Federation of Bangladesh Chambers of Commerce and Industry in collecting turnover and package value-added tax from businesses, particularly from small and medium traders.
The NBR in a letter to the FBCCI, the apex trade body in the country, made the request after it found a gradual decline in VAT collection from the areas over the years.
Value-added tax wing of the NBR on Wednesday sent the letter to FBCCI president Shafiul Islam Mohiuddin requesting to issue necessary instructions to all chambers and trade bodies across the country so that traders pay the applicable VAT.
Currently, small retailers located in the Dhaka and Chittagong city corporations having annual value-addition up to Tk 1,86,667 or annual sales up to Tk 7 lakh enjoy package VAT benefits paying Tk 28,000.
The rates of package VAT are Tk 20,000, Tk 14,000 and Tk 7,000 for businesses based on their locations in other city corporations, districts and other areas and their annual turnover.
On the other hand, traders having annual turnover up to Tk 70 lakh pay VAT at the rate 4 per cent of total turnover.
Large businesses pay VAT at the rate of 15 per cent on actual value addition.
The letter, signed by NBR first secretary (VAT policy) Hasan Mohammad Tarek Rikabder, said that currently growth in VAT collection from the areas — turnover tax and package VAT — was not satisfactory.
The overall collection from the wholesale and retail trade has been declining in recent years and stood only at Tk 1,175.88 crore in July-February of the current fiscal year, it said.
According to the data, the NBR collected Tk 2,381.73 crore in trade and package VAT in FY 2015-2016, which dropped to Tk 1,891.56 crore in FY 2016-2017.
‘In this context, the NBR is seeking cooperation from the business leaders and trade bodies,’ the letter stated.
Revenue earnings have been declining despite the rate of package VAT increased, it said.
Officials said that traders usually paid turnover VAT and package VAT at the end of a fiscal year.
Hopefully, the collection from the sector would increase in June if the FBCCI issues an instruction to its members and other traders for paying the VAT, they said.
They also said that the government would continue the trade VAT and package VAT system in the upcoming fiscal year.
A senior NBR official said that package VAT collection was disrupted in last fiscal year following demonstration of businesses against the planned withdrawal of package VAT under the new VAT law which was supposed to come into force from the current fiscal year.
Later, the government deferred the implementation of the law until July, 2019 but the collection did not get momentum, he said.
According to the NBR statistics, nearly 12,000 shops across the country annually pay on an average Tk 15 crore to Tk 18 crore as package VAT.
He said that many traders who have large amount of annual transactions illegally avail the package VAT benefit and evade a significant amount of revenue though they are supposed to pay either turnover VAT or regular VAT, field-level VAT.

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