VAT intelligence unit of the National Board of Revenue on Tuesday withdrew its decision of making submission of VAT returns mandatory for getting loans from commercial banks following widespread criticism from the business community.
VAT Audit, Intelligence and Investigation Directorate of the NBR said that it had reversed its decision so that businesses could easily avail loans from the stimulus packages and bring back momentum in trade and business in the country.
The directorate director general Syed Mushfequr Rahman informed the Bangladesh Bank deputy governor Ahmed Jamal that it had annulled the activities related to cross-checking of financial reports with VAT returns before approving any business loan application.
Earlier on June 18, Mushfequr requested the central bank to instruct commercial banks to cross-check financial reports with VAT returns before approving loan application.
The letter was also sent to the chief executive officers of all commercial banks saying that banks should verify whether there were any inconsistencies in the information provided in the value-added tax returns and financial reports or audit reports of a business entity, except for 100 per cent export-oriented ones, before giving approval to a loan application.
Bank officials concerned would be considered responsible if they do not bring the inconsistency between the VAT returns and financial reports to the notice of VAT intelligence, the letter said.
Businesses criticised the move saying that it would make the loan approval process lengthy and create complexities as they would bound to provide VAT returns with loan application.
In the latest letter, VAT intelligence said that it issued the previous letter as a strategy to increase revenue collection through ensuring authenticity of the sales-purchase data traders provide in VAT returns and financial reports.
Now, it cancelled the move to keep economic activities smooth and activate amid the coronavirus outbreak and resolve hassle of the taxpayers, it said.
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