FBCCI warns NBR about VAT law execution

Staff Correspondent | Published: 23:14, Feb 19,2017 | Updated: 23:36, Feb 19,2017

 
 

The Federation of Bangladesh Chambers of Commerce and Industry has warned the National Board of Revenue that implementation of the new value-added tax act would be hampered if the unsettled disputes related to VAT measures are not immediately solved.
Discussion between the NBR and the FBCCI for preparing national budget for the upcoming fiscal year 2017-18 will also be hampered over the issue, the federation cautioned.
The new VAT and Supplementary Duty Act-2012 is scheduled to be implemented from July 1 this year.
The business community including the FBCCI has long been demanding reduction in the rate of package VAT which was doubled in the current fiscal year 2016-17 and reinstatement of the system in the new VAT law.
Immediately after announcement of the budget for FY 17, the federation also made some other demands related to income tax, customs duty and VAT including VAT waiver for manufacturers of biscuit and rubber made shoes.
The FBCCI, the apex trade body in the country, in a letter to the NBR chairman Md Nojibur Rahman also said that the business community was eagerly waiting for the promised announcement of the NBR solving the problems.
According to the FBCCI, the revenue board promised them to make an announcement on the issues particularly reducing the rate of package VAT for small traders by January 10.
Earlier on January 10, the trade body requested the NBR to fulfill its pledge immediately.
‘We are eagerly waiting for your promised declaration about the existing problems related to VAT,’ the FBCCI said in the letter signed by its secretary general Mir Shahabuddin Mohammad.
Budget formulation activities are set to begin soon
while the government decided to implement the new VAT law from July 1, the letter stated.
‘In this context, both implementation of the new law and budget discussion between the FBCCI and the NBR will be hampered if the problems are not immediately solved,’ it said.
It is important to make the announcement for continuation of the ongoing discussion related to implementation of the new VAT act, the federation said.
The FBCCI also forwarded a copy of the letter to finance minister Abul Maal Abdul Muhith.
Finance ministry officials said that the government initially wanted to cut the rate of package VAT which was doubled in the current fiscal year. But later it opted for a go-slow policy on the issue.
On the other hand, the revenue board on January 27 issued a public notice aimed at removing the confusion about package VAT.
In the notice, the NBR said that small traders having annual turnover up to Tk 30 lakh were kept out of the purview of the VAT in the new law while all small traders having annual turnover up to Tk 7 lakh are to pay package VAT under the existing law.
So, small traders will not be affected in the new VAT regime, rather they will enjoy VAT exemption, it said.
In addition, VAT is paid by consumers, not traders, said the revenue board.

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