Finance Minister AHM Mustafa Kamal said on Tuesday the new value added tax (VAT) law will be implemented from the next fiscal year as the businesses and the government sank differences over it.
"I have assured the businessmen that there will be no increase in tax rates on any product. Rather there could be reduction of the same in the next budget. They have put trust in me," he told reporters after a meeting with the National Board of Revenue (NBR) and the apex trade body FBCCI.
"Earlier there were some differences. It has now been resolved," he said after the meeting at his Economic Relations Division office at Sher-e-Bangla Nagar in Dhaka.
"We have discussed it with the business community today. They are now convinced. There is no misunderstanding now," Mr Kamal said.
"We cannot disclose details of the VAT law at this moment for its sensitivity. But the law will not be harmful, rather it will be business-friendly," he said.
Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Md Shafiul Islam Mohiuddin said the minister had assured them that the VAT rates would not be raised on any item, rather those might decline in some areas.
"That is enough for us to have trust and confidence. We want to keep faith in the assurance that we got from the honourable minister," he told reporters after the meeting.
The consensus on implementation of the new VAT law came on Tuesday after the last few days of bickering between the apex trade body and the NBR.
The FBCCI in a letter to the NBR in early May said the VAT law in its new form might fuel inflation and create unrest in the society, if implemented from July 1 without adequate "readiness".
In reply, the NBR accused the country's apex trade body of trying to block implementation of the law again.
The revenue authority said it made enough preparations before going for implementation of the new law from the upcoming fiscal year.
The law was initially prepared in line with suggestions from the International Monetary Fund with a uniform 15 per cent VAT rate on goods and services imposed.
It sparked furore and the government agreed to impose multiple rates under the new law.
The government deferred enforcement of the new VAT law thrice, the latest being in June 2017, when it announced at the eleventh hour the postponement of it by two years.
After Tuesday's meeting with the FBCCI, the Finance Minister said the VAT rates set earlier would remain unchanged.
"We have no plan to increase rates on any item. We are saying the same thing that we said earlier. Nothing new has been added," said Mr Kamal.
He said they would proceed with it the way they started and the FBCCI gave assurance that they had no objection. "Because we have included all that they demanded."
Mr Kamal said, "The implementation of VAT law is not a task that can be done in a day or two. It is a continuous process and changeable. If we face any obstacles while implementing the law, we will amend them for making it people- and business-friendly."
He said the businessmen wanted to know about the VAT rates which were not disclosed as they were not obliged to make it public before announcing the budget.
NBR Chairman Mosharraf Hossain Bhuiyan said the Board will have the scope to amend and reform the VAT law in future, if it creates any obstacles.
"We are seeking support from all quarters in implementing the VAT law. And a working group comprising NBR and FBCCI representatives will be formed which will work to reform the VAT law in future," he added.
FBCCI President Mohiuddin said, "The country belongs to all. We are always with the finance minister. He has assured us that the tax rates will not be raised, rather the tax-net will be expanded."
Newly-elected FBCCI President Sheikh Fazle Fahim, former Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Siddiqur Rahman and other businessmen were present at the meeting.
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