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New VAT law to come into force from next fiscal year

Multiple rates to be retained: NBR chief

FE Report | December 10, 2018 00:00:00

The new VAT law will come into force from the next fiscal year with multiple rates instead of a uniform rate of 15 per cent, the head of NBR said on Sunday.

The National Board of Revenue (NBR) may keep three rates of VAT as the uniform rate is not perfect for the country's economy, said NBR chairman Md Mosharraf Hossain Bhuiyan.

He disclosed this while talking with reporters at a briefing on the occasion of National VAT Day-2018 to be observed today (Monday).

He said the tax authority has also started the process of finding out why the 2012 VAT (Value Added Tax) law could not be implemented during the last several years.

Responding to a question about the justification of enforcing a new law with multiple rates as the existing law has the same, the NBR chairman admitted that the current one is also good, which has been functioning smoothly for many years.

The NBR has formed a committee to take necessary measures as per its recommendation, he added.

The government had passed the new VAT and Supplementary Duty Act-2012 with 15 per cent uniform rate for all kinds of businesses.

In the budget for FY 2017-18, the government deferred enforcement of new VAT law by two years.

"The new law will have some provisions in line with international best practices," the NBR chief said.

The automation of VAT administration will also be a priority for reducing the corruption of both VAT officials and businesses, he said. For automated record-keeping, the NBR will start encouraging businesses to buy Electronic Fiscal Device (EFD) from January next.

Referring to tax exemptions in recent times ahead of national polls, the NBR chairman said the board will have to keep some other issues in its consideration apart from revenue collection.

"We have provided tax incentives to the power and gas sectors to keep its tariffs low at the consumers' level," he said.

Unless the NBR offered the tax exemptions, prices of Liquefied Natural Gas (LNG) would go up sharply, threatening the country's industrial production, he said.

He said the tax benefit for the readymade garment exporters has been offered in response to their pleas as they will have to hike wages of their workers.

Apparel exporters are getting duty-free facilities on the import of raw materials under bonded-warehouse facility and their production capacity has also increased, the NBR chair said.

The NBR chairman said the board will increase its awareness campaign to offset loss of revenue due to tax exemption.

He said there is an enormous untapped potential in VAT collection as evasion is pervasive.

On Border Guard Bangladesh (BGB) members' recent attack on three customs employees in Tamabil land port area, the NBR chairman said he would talk to the home minister over phone and send him a letter expressing concern over the issue.

On National VAT Day-2018, the NBR would honour a total of 144 top VAT payers at the national and district levels.

The board will also observe the National VAT Week-2018 from December 10-15 across the country.

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