National Board of Revenue has blamed of the Federation of Bangladesh Chambers of Commerce and Industry for trying again to create obstacles in implementation of the new VAT act.
In a letter to FBCCI president, NBR also said that they had adequate preparations to place the Value-Added Tax and Supplementary Duty Act-2012 in parliament in the upcoming budget for the fiscal year 2019-2020.
Carrying out an impact assessment to replace the existing VAT system should not be a pre-condition of the business community, the letter, signed by NBR second secretary (VAT policy and rules) Md Tariq Hassan, said.
NBR issued the letter in response to the latest letter of FBCCI, in which the apex trade body claimed that NBR was not ready to implement the VAT law and NBR skipped a pre-scheduled meeting on implementation of new VAT law.
FBCCI, on May 5 in a letter to NBR chairman, expressed apprehension that implementation of the ‘unprepared and much lingered in terms of re-evaluation’ VAT law would create inflation which may lead to public suffering, resentment and instability in society.
FBCCI also blamed that NBR did not take any visible steps to amend the law and carry out an impact assessment in two years since postponement of the implementation of the law in July 2017.
In response, NBR said that has already brought necessary amendments in the 2012 VAT Act and VAT Rules-2016 as per the decisions of the coordination meeting between NBR and FBCCI held on March 31 with finance minister AHM Mustafa Kamal in the chair.
‘NBR has adequate preparations to place the law in the next budget and FBCCI does not have any reasons to be worried,’ the letter said.
Regarding FBCCI’s allegations of skipping the meeting scheduled to be held on May 2, NBR said that it arranged the meeting as per decision of Mary 31 meeting.
A four-member delegation of FBCCI came to NBR to attend the meeting but they requested NBR to re-schedule the meeting after talking with someone of the trade body over phone, NBR said.
So, it is disappointing that the FBCCI brings such allegation about not holding the meeting despite serving meeting notice, it added.
‘It is assumed that FBCCI is trying to create obstacles again in implementation of the law,’ the letter said.
Regarding carrying out an impact assessment on new VAT law, NBR said that it had requested eight research organisations including Centre for Policy Dialogue but the organisations did not show interest to do the job.
Carrying out an impact assessment to replace the existing VAT system should not be any pre-condition of business community, NBR added.
FBCCI agreed on the NBR’s proposals to increase the VAT-free limit to Tk 50 lakh from current Tk 30 lakh, raise ceiling of turnover tax to Tk 3 crore from previous Tk 80 lakh and increase turnover tax rate to 4 per cent from 3 per cent.
FBCCI also agreed to set the VAT rates to 5 per cent, 7.5 per cent, 10 per cent and 15 per cent instead of single rate of 15 per cent.
At the meeting, FBCCI also expressed its positive view over implementation of the new VAT law, the NBR said.
In the letter NBR also said that on November 11, 2018, it formed a high-powered committee to review the new VAT law as per observations of various trade bodies.
The NBR sent the recommendations of the committee to the FBCCI but it did not give any of its opinion regarding the report yet, the letter said, though it praised the recommendations of the committee in various occasions.
NBR has been preparing to implement the law after addressing the objections of business communities.
In this context, such letter from FBCCI is disappointing and the FBCCI should review in what situation the letter was sent, NBR letter said.
FBCCI president could not be reached for comment despite several attempts.