The National Board of Revenue has rejected the Bangladesh Investment Development Authority’s proposals to reduce value-added tax rate for financially vulnerable companies and introduce quarterly VAT returns submission system.
VAT wing of the revenue board has recently informed the investment promotion agency about the revenue board’s decision.
BIDA included the proposals in its action plan prepared to improve the country’s ranking in the ease of doing business index of the World Bank.
BIDA in September requested the NBR to relax the tax and VAT issues through issuing statutory regulatory order for companies facing financial problems and to introduce provision of quarterly, instead of monthly, VAT returns submission.
According to the NBR, businesses deposit VAT collected from consumers to the government exchequer and show the payment in their VAT returns.
VAT is an indirect tax and the liability of the tax goes to consumers not to companies, it said.
So, there is no rationale behind the relaxing of the VAT rate for financially vulnerable firms, it said.
Rejecting the proposal to introduce quarterly VAT returns submission, the revenue board said that consumers paid VAT instantly after purchasing any goods or services.
Officials said that there should be no problems for businesses in depositing the VAT they would collect to the government exchequer through monthly VAT returns.
The filing of monthly VAT returns is a provision in the VAT and Supplementary VAT Act-2012, inherited from the 1991 VAT Act, they said.
Bringing any change to the law will require amendment to the law.
So, it will not be logical to introduce the quarterly VAT returns submission instead of existing monthly submission for the sake of keeping revenue collection growing, according to the NBR.
BIDA also requested the NBR to issue business identification numbers within two days for the companies which are located in Dhaka and Chattogram and are registered with office of the Registrar of Joint Stock Companies and Firms.
The revenue board, however, said that firms were provided BINs within three days of filing application after primary scrutiny.
So, there is no necessity to change the existing provision related to registration, it added.
VAT wing of the NBR, however, appointed officials for implementation and monitoring of action plans related to reduction in time for VAT refund and implementation of online VAT returns filing and e-payment system.
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