Businesses demand VAT threshold up at Tk 5.0m

Businesses demand raising the value-added tax (VAT) threshold for small traders to a turnover of Tk 5.0 million from Tk 3.0 million as a trade-off in withdrawing the package-VAT system.
Former FBCCI vice-president and president of Dhaka Mohanagar Dokan Malik Samity Helal Uddin said the VAT-free turnover ceiling could be raised for small businesses in the new law to be enforced from July 1, 2017. "Monthly sales of a shop will be Tk 0.4 million if the VAT-exemption ceiling is fixed at Tk 5.0 million," he said.
The new VAT and Supplementary Duty Act 2012, which is scheduled to come into force on July 1 next year, is set to scrap the package VAT system that is meant for small traders.
Recently, traders came out with protests and gave an ultimatum to the government to press their four-point demand, including continuation of package VAT in the next fiscal year and also lowering the existing amount of package VAT.
Responding to their demand, the National Board of Revenue (NBR) sat with the traders Wednesday on its premises.
After the meeting was over, Mr Helal Uddin said the businesses demanded VAT exemption for bread, sandal and handmade biscuits. "We are ready to pay VAT as per new VAT law from July 1, 2017. Before that, we requested the VAT authority to consider the sector for VAT exemption," he said.
Amir Hossain Noorani of Bangladesh Iron and Steel Importer Association said, "We stuck to our position on calling an indefinite strike unless our demands are met by November 20," he said.
Traders demanded reintroduction of turnover tax in manufacturing units in Dhaka and Chittagong city corporation areas, VAT exemption for plastic and rubber sandal up to Tk 120, bread and biscuit per kilogram up to Tk 100, lowering the existing package VAT and continuation of the system in the upcoming fiscal.
Mr Noorani said businesses want to pay VAT but hassle over submission of VAT return discouraged them.
The government could collect VAT in the form of Advance Trade VAT (ATV) instead of mandatory system of submission of return, he added.
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