A review committee has recommended upward adjustment of the minimum ceiling of value added tax (VAT) exemption to Tk 3.6 million turnover considering the hurdles the small businesses encounter in record keeping.
Earlier, the VAT law, to be implemented from July 01 2016, had set the limit at Tk 2.4 million turnover to facilitate small businesses.
They also recommended allowing multiple rates of VAT instead of slapping a uniform 15 per cent on all businesses above the threshold.
The recommendations came in a report of a review committee of new VAT and supplementary duty (SD) law, 2012.
The seven-member committee submitted the report to the Finance Minister AMA Muhith Sunday. Â
The government formed the review committee following allegations coming from the businesses that it had bypassed their recommendations while adopting the new Value Added Tax (VAT) and Supplementary Duty (SD) law, by the Jatiya Sangsad in 2012.
The committee, comprising both private and public sector experts, recommended 10 major changes in the law.
Representatives of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and the National Board of Revenue (NBR) expressed different views on five provisions of the new law.
It recommended the government to allow businesses to enjoy 3.0 per cent turnover tax for those having annual turnover above Tk 3.6 to Tk 15 million. However, the committee members recommended not to allow those businesses which had paid in advance to enjoy tax rebate.
The review committee said businesses can be allowed to pay turnover tax on their actual sales every month.
It suggested imposition of 2.0 per cent VAT on small and medium businesses on the basis of turnover but having turnover above Tk 3.6 million, instead of uniform rate 15 per cent in the law.
 "Businesses that would not be able to obtain tax rebate can be offered reduced tax rate. Reduced rate of VAT is also available in other developed and developing countries," the committee report said.
The report also suggested to cut discretionary power of taxmen including holding the suppliers responsible for not depositing VAT to the public exchequer, freezing bank accounts etc.
The FBCCI said there is no scope for carrying out additional responsibilities by a shareholder other than the duties in the company law. But, NBR officials opined for keeping the provision unchanged.
On freezing of bank accounts and seizure of properties, the FBCCI said such steps should be avoided until the court convicts the taxpayers for irregularities. However, NBR officials supported the provision as existing VAT, customs and income tax laws still have the measure.
doulot_akter@yahoo.com
Review body suggests 10 major changes in new VAT law
Doulot Akter Mala | Published: January 20, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
Share if you like