Proposed VAT law to be effective in 2-3 years

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FE Report The proposed Value Added Tax (VAT) might take two-three years for full-fledged implementation after its passage in parliament, NBR chief said Wednesday. Businessmen will be able to pay VAT without harassment after enactment of the new VAT law, said Dr Nasiruddin Ahmed, chairman of the National Board of Revenue (NBR) at a meeting on 'stakeholder consultation on the Draft VAT Law'. "The new VAT law will not come into force before, July 1, 2014, but its enactment should be made in 2012," Policy Research Institute (PRI) executive director Dr. Ahsan H Mansur told the FE Wednesday. "The NBR needs some time to work on the proposed," he added."The proposed VAT law is simple and it will increase VAT collection," NBR chairman said. The NBR and PRI arranged the meeting with the support of International Finance Corporation (IFC) at a city hotel. The revenue board received poor response from the businessmen in the discussion meeting. Only Real Estate and Housing Association of Bangladesh (REHAB) attended the first discussion out of 15 business association invited to attend the programme. Later, representatives from the jute, agro-processing and knitwear manufacturing sectors attended the second session. REHAB representative Anisur Rahman Khan and NBR commissioner (VAT) Barrister Jahangir Alam attended the programme. NBR commissioner focused on different aspects of new VAT law. "The new law is more simple than that of the existing law of 1991. The proposed law has abolished the provision of arresting businessmen by tax officials," he said. It has also scrapped the provision of searching goods in goods-carrying vehicles and advance VAT payment, it said. It has cut VAT exempted area, kept VAT rate at 15 per cent and truncated value of VAT, he added. Dr. Mansur said significant provisions of the proposed law are: withdrawal of current account system, price declaration method, allowing private sector to give discount, scope for electronic tax payment, registration, return submission etc. REHAB representative, who is chairman of the VAT tax registration committee, expressed his satisfaction over withdrawal of the punitive measures for businessmen.