MCCI seeks ‘transition period’ before new VAT law implementation

Staff Correspondent | Published: 22:43, Jan 08,2017

 
 

Finance minister AMA Muhith and Metropolitan Chamber of Commerce and Industry president Nihad Kabir are seen while newly-elected office bearers of MCCI make a visit to Muhith’s secretariat office in Dhaka on Sunday. — New Age photo

The Metropolitan Chamber of Commerce and Industry has identified inadequate supply of infrastructure, inefficient bureaucracy, lack of skilled labour force and crime and theft as main barriers to ‘doing business’ in the country.
It has recommended that the government should give attention to improving bill collection and reducing system loss of electricity instead of increasing the electricity tariff to reduce financial losses of the power plants.
The country incurs losses of Tk 1,500 crore from power distribution, leakage and pilferage.
A reduction of one per cent system loss could save around 45 megawatt of power, according to the MCCI proposals submitted during the meeting with finance minister AMA Muhith at the secretariat in Dhaka on Sunday.
MCCI members led by its president Nihad Kabir expressed their worries that implementation of the VAT law from July without giving a ‘transition period’ to the businessmen might create problems.
Nihad stressed the need for a ‘transition period’ for better implementation of the law.
Delaying the implementation of the new VAT law for several times in the last few years, Muhith set the new deadline of July 2017 almost a year ago.
Many provisions in the law like 15 per cent VAT rate for all sectors and withdrawal of package VAT for small traders and retailers were opposed by a section of businessmen and traders.
During the meeting, the MCCI members demanded that the government take measures to check counterfeit and forged consumer products and medicines flooding the local market.
Genuine and compliant businessmen are facing problems because of the trend, they said.
In its proposals, the MCCI said domestic savings and investment remained stagnant as the gross investment was at historic low at 28.7 per cent of the gross domestic product.
It said the investment rate should be increased to 35-40 per cent to absorb 1.8 million new entrants to the job market every year.
The MCCI said the new investment was not coming due to weak investment climate with the unemployment rate was high.
It expressed concerns over the slump in the inflow of remittance as the country’s balance of payment is heavily dependent on it.
The MCCI suggested that the government bring improvement in banking and monetary policies to plug in loopholes in poor governance that infected the portfolios of the state-owned banks and private banks too.
It said statements by the policy makers that loan defaulters, fraudsters and swindlers of bank money were too powerful to be brought to justice were ‘unfortunate’.
The MCCI said the governance in the state-owned banks should be improved to enhance recovery of the bad loans.
It urged the political parties to shun acts of violence and resolve the longstanding political contention through meaningful dialogue to restore a peaceful political environment in the country.

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