The country's business community continues to put pressure on the government to have VAT (value-added tax) Act 2012' amended to make it 'more business and compliance-friendly', officials said.
The leaders of the apex trade body, Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), will meet finance minister AMA Muhith today (Sunday) at his Secretariat office to discuss about the amendment of the law as the International Monetary Fund (IMF) is 'poking its nose' into the matter.
Resident representative of the IMF in Bangladesh Stella Kaendera, in a recent letter to finance secretary Mahbub Ahmed, sought assurance from the government that it would not 'water down' the VAT Act, which is scheduled to be enforced on July 01, 2016.
A government-formed review committee, following allegations from the business community that it had bypassed their recommendations while adopting the new VAT Act, submitted a report to Mr Muhith in January last recommending 10 major changes in the law.
Officials said the FBCCI in a recent letter to the finance minister requested him to compare the review committee's proposals with the existing international VAT regimes and practices to check whether those proposals will water down the VAT Act 2012 or not.
The apex trade body also raised question if the IMF has any jurisdiction of prescription in terms of VAT to be applied in Bangladesh as a condition for releasing extended credit facility (ECF).
"The IMF's concerns and conditionalities about so-called 'watering down' of the VAT Act should be assessed in the context of the 'ministerial declaration on the contribution of the WTO in achieving greater policy coherence' in economic policy-making, and in accordance with the agreement between the WTO, the IMF and the World Bank," the FBCCI said in the letter.
Officials at the ministry of finance (MoF) said the release of last two tranches of ECF funds worth US$280 million has become uncertain as the government has failed to make its commitment on implementation of the VAT Act and meet some other conditions.
The sixth instalment of the ECF was scheduled to be released in November last, while the final one in February.
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