Federation of Bangladesh Chambers of Commerce and Industry has expressed its fear that the implementation of new VAT law in next July will create inflation which may lead to public suffering.
Rising inflation will go against the interest of mass people and create instability in society, it said.
Formation of any law in contradiction with the ease of doing business and state policy may ignite resentment among people, it added.
The apex trade body said that they did not see any visible steps from the National Board of Revenue to amend the VAT and Supplementary Duty Act 2012 in last two years after suspension of implementation of the law in June 2017.
In a letter to NBR chairman Mosharraf Hossain Bhuiyan, FBCCI on Sunday said that NBR even did not carry out an impact assessment on the law for which the trade body has been demanding for since 2017.
FBCCI raised the issue just a month ahead of implementation of the law.
Finance minister AHM Mustafa Kamal and NBR chairman Mosharraf Hossain Bhuiyan have repeatedly made their position clear that VAT law would be implemented from July as per instruction of prime minister and decision of the parliament.
‘As per the suggestions of stakeholders and economists, FBCCI expresses apprehension that implementation of the “unprepared and much lingered in terms of re-evaluation” VAT law will create inflation,’ the letter, signed by FBCCI secretary general Hussain Jamil, said.
Since 2012, FBCCI has been claiming that the new VAT law is not, in any way, implementable in the country’s socio-economic context.
The parliament as per suggestion of prime minister Sheikh Hasina in June 2017 deferred the implementation of the law until July 2019 following strong opposition of business community, including FBCCI, on various provisions, including introduction of single 15 per cent VAT rate, withdrawal of package VAT and some other issues, of the law.
The new law is now set to be implemented from next July with multiple VAT rates preferably 5 per cent, 7.5 per cent and 10 per cent along with some other existing rates.
FBCCI, in the letter, said that NBR should provide rebate facility for goods and services with multiple VAT rates under the law otherwise it would cause inflation.
FBCCI expressed concerns as the recommendations came from the meetings with stakeholders held in last two years were not reflected in actions.
NBR on May 2 conveyed a meeting on amendment and implementation of the law but finally the meeting was not held, FBCCI said, adding that it was a matter of disappointment to cancel the meeting after serving notice.
FBCCI said that it had been demanding for an impact assessment on the law once the implementation of the law was deferred for two years.
Considering the time constraints, the apex trade body on February 2018 sought a cost benefit analysis on the law, it said.
FBCCI even did not get the minutes of the meetings held between the trade body and NBR over the last two years, it alleged.
FBCCI is a trade body consists of 484 chambers and associations.
Sources in FBCCI said that they wanted implementation of the law after addressing the issues related to inflation, rebate system and other issues.
NBR should also share the amendments and changes with the business community, they said.
Officials of NBR said that the government had already decided to incorporate a number of demands, including introduction of multiple VAT rates, increasing VAT-free turnover ceiling and the threshold for turnover VAT, in the new law.
They said that rebate facility would be applicable only for those products which would pay 15 per cent VAT at all stages of supply chain like import, production and sales.
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