The International Business Forum of Bangladesh on Wednesday expressed concerns over the provision of 15 per cent uniform VAT rate in the proposed Value Added Tax Act.
The proposed 15 per cent uniform VAT has already created panic among the businesspeople and consumers, IBFB leaders said while sharing their budget reactions at the National Press Club in Dhaka.
They said there will be hike in the prices of essentials and significant inflation if the provision of 15 per cent uniform VAT is finally kept in the budget.
Finance minister AMA Muhith kept the uniform 15 per cent VAT, to take effect from July 1, in his budget for the next fiscal year.
IBFB president Hafizur Rahman Khan said that Bangladesh was now in the top of the list of the average rate of VAT among the South Asian countries with the proposed uniform VAT.
He said the average rate of VAT in India, Pakistan, Nepal, Afghanistan and Sri Lanka is 13.5 per cent while the rate in the low income nations of ASEAN countries is 11.8 per cent and the average rate in 190 other countries of the world is 13.8 per cent.
Hafizur said that it would be good for all, either businessmen or consumers, if the government fixed the VAT rate at 12 per cent.
He demanded increasing tax on Bidi, cigarette, bank, insurance and mobile phone companies to fill up the deficit caused by reducing VAT rate.
Hafizur said it was unfortunate that the government had imposed VAT on the local new industries.
He said that the middle class would have to bear the brunt of severe inflationary pressure with the imposition of a uniform rate of VAT in the proposed budget.
Although the IBFB lauded the government for taking a big Tk 4 lakh crore, it lamented declining rate of budget implementation for the last few years.
The forum also requested the government to withdraw its decision to hike excise duty on bank deposits.
IBFB founder president Mahmudul Islam Chowdhury, its vice-president Humayun Rashid and director Md Mozibur Rahman addressed, among others, the programme.