NBR turns down IMF plea to keep small businesses out of turnover tax

FE Team | Published: September 12, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

Shakhawat Hossain
The National Board of Revenue (NBR) has disagreed with an International Monetary Fund (IMF) suggestion relating to keeping the business entities with annual transaction of less than Tk 5.0 million out of turnover tax purview, sources said.
The visiting IMF team while discussing with the NBR officials made the recommendation to lessen tax burden in form of Value Added Tax (VAT) on small and new business enterprises.
But the VAT policy-making wing has turned down the IMF suggestion on the ground that it might hamper the revenue generation and lead to shortfall in annual target, sources added.
Currently, the NBR is collecting 4.0 per cent turnover tax from a business entity having an annual transaction worth Tk 2.0 million and above.
The IMF also suggested increase in the rate of tax after fixing ceiling of annual turnover at a higher slab to make up for the losses.
The NBR official told the Washington-based multilateral agency that it had VAT large tax payers unit to deal with large VAT payers.
They also said VAT wing has already taken steps to intensify collection at retail and wholesale levels, source said.
The wing has decided to introduce electronic cash register in the retail and wholesale shops to evade VAT.
It has already sent letters to the authorities concerned to attach condition of installing the electronic cash register to issuance and renewal of trade licences, sources added.
It is imperative for the NBR to bring changes in its revenue collection mechanism to achieve the annual target of more than Tk 120 billion from the VAT at local level.