NBR, FBCCI agree to apply new VAT law: Finance Minister
Published : Wednesday, 15 May, 2019 at 12:00 AM Count : 1053
After a long discussion and debate the government is going to implement the much talked-about 'Value Added Tax (VAT) and Supplementary Duty Act, 2012' from the upcoming fiscal year 2019-2020.
Finance Minister AHM Mustafa Kamal on Tuesday declared it after a long discussion with business leaders including Federation of Bangladesh Chambers of Commerce and Industries (FBCCI).
He firmly said the law would be introduced from July 1, the first day of the upcoming fiscal year.
The minister came up with the remark after a meeting with the leaders of the country's apex business body Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) at his office in Agargaon in the capital.
"The new law 'Value Added Tax (VAT) and Supplementary Duty Act, 2012' will be introduced on July 1", the Minister said.
"I think now there is no disagreement between the government and the FBCCI as all of those gaps have been minimized. We're now looking forward to implementing this VAT law from the first of July," he said.
The government at the budget session of the parliament in 2017 suspended
the implementation of the law for two years until June 2019 following strong opposition from traders on various provisions of the law including single 15 per cent VAT rate on all goods and services.
Mustafa Kamal presided over the one-and-a-half-an-hour meeting which started at 12 o'clock.
The National Board of Revenue (NBR) Chairman Md Mosharraf Hussain Bhuiyan, FBCCI President Sheikh Fazle Fahim (elect), outgoing President Shafiul Islam Mohiuddin and immediate-past BGMEA President Siddiqur Rahman were present, among others.
The Finance Minister said there was a sort of misunderstanding with the FBCCI. It earlier demanded of the government to have a look at the final draft of the VAT law before passing it in parliament.
But, there are some technical difficulties as there is no such provision in the law to discuss over the final draft of the law until it is passed in parliament, Kamal said.
"If we don't have the cooperation from the business community, then the entire exercise will be frustrated. For this, we seek their cooperation in a bigger way," he added.
Kamal said the FBCCI and the business community have now assured him that they do not have any objection now to the law as all of their demands have been incorporated.
He said after getting a start, the full implementation of the VAT law would continue to take place as newer items will come every now and then.
"It might take a pretty long time to fully implement it……VAT is now in place on a limited scale, but we want to operationalize it in a more transparent, organized and hassle-free way so that no taxpayer gets hurt as well as the government gets VAT properly. We want to get VAT through a win-win situation and we're working to create that equilibrium, "he added.
Answering to a question, Kamal said he has assured the FBCCI leaders that as per the methodology that the government is now following, there is no such plan to increase the VAT rate, rather it will be reduced on some items.
He told another questioner that the proposed three-tier VAT rates would remain the same in the new VAT law.
NBR Chairman Md Mosharraf Hussain Bhuiyan said they would resolve the disputes if anything of that arises during the implementation of the new VAT law.
Shafiul Islam Mohiuddin said, "We want to keep confidence and believe in Finance Minister's assurance that he would wide tax net not hike taxes of any item rather taxes would be reduced in some cases."
Mentioning that there might be differences of opinion, Shafiul said, "We always try to bridge the gap and come to a common platform to take it forward. The tax-GDP ratio is still low in the country and we always want to address it properly....we want to move forward together.
He said, "We developed the system that taxpayers pay tax without any pain."