Businesses react sharply toproposed new VAT law
FE Report | Monday, 7 March 2011
FE Report
Businessmen expressed Sunday their strong resentment at the new VAT law, scheduled to be enforced from 2012, demanding continuation of the existing VAT law with amendments as it is working successfully contributing higher revenue to the public exchequer. They also sought continuation of the truncated system of VAT collection for small and medium businesses and also the withdrawal of different punitive measures like jail and penalties proposed in the draft VAT law. Leaders of the country's apex chamber body FBCCI (Federation of the Bangladesh Chambers of Commerce and Industry), shopowners associations and light engineering and Bangladesh re-rolling mills associations voiced these views at an opinion- exchange meeting arranged by the National Board of Revenue (NBR) at the Diploma Engineers' Institute in the city. Finance minister AMA Muhith attended the meeting as the chief guest. FBCCI president AK Azad recommended enforcement of the new laws in phases with some corrections. He said the new law proposed jail penalty for VAT evaders which is insulting and offensive for businessmen. "The existing rule allows taxmen to search and freeze bank accounts of VAT evaders. The new rule of jail and penalty provisions should be withdrawn," he said. The apex chamber leaders appreciated the NBR's effort on preparing a comprehensive VAT law. Amir Hossain Khan, president of the Bangladesh shop-owners association, said the new VAT law is not required as the existing VAT law was enforced only 20 years back and it is working smoothly. "People understand the existing VAT law now and it has been implemented successfully," he said. Abdur Razzak, president of the Bangladesh light engineering association, said small and medium industries will face a serious setback following the enforcement of the new law. "The draft law has proposed withdrawal of truncated VAT system which will affect small and medium businesses. These businesses cannot keep transaction records," he said. This law may trigger mass agitation, he said adding that the government would have to rethink before enforcing the new law, he said. Finance minister AMA Muhith said he is surprised at the reaction of the businessmen to the new VAT law as the move on preparation for the new Vat law was launched in fiscal 2009-2010. He said the government would arrange a workshop with the businessmen to discuss the new VAT law. Muhith termed the truncated VAT system as 'discretion-based' and stressed the need for withdrawal of it. Bangladesh re-rolling mills association secretary general Abu Bakar Siddique urged the government to continue tariff value and collect income tax at production stage like VAT. FBCCI adviser Manzur Ahmed strongly opposed the new law, saying 'existing law is working superbly'. He stressed the need for impact assessment of the new VAT law by forming a national committee with private partnership. Beximco group deputy chairman Salman F Rahman said the government must be careful on preparing such laws. It might create serious repercussion among businessmen, he said. "I got scared when I came to know about the changes in the new VAT law. The government and businessmen should sit together to discuss it," he said. NBR chairman Dr. Nasiruddin Ahmed assured the businessmen of revisiting the draft VAT law after consultation with the businessmen. "The revenue board will be careful in preparing new VAT law. The board will arrange a workshop soon to discuss it with the businessmen," he said. Barrister Jahangir Hossain, commissioner of the Large Taxpayers Unit VAT, gave a presentation describing the 31-point major changes under the proposed VAT law.
Businessmen expressed Sunday their strong resentment at the new VAT law, scheduled to be enforced from 2012, demanding continuation of the existing VAT law with amendments as it is working successfully contributing higher revenue to the public exchequer. They also sought continuation of the truncated system of VAT collection for small and medium businesses and also the withdrawal of different punitive measures like jail and penalties proposed in the draft VAT law. Leaders of the country's apex chamber body FBCCI (Federation of the Bangladesh Chambers of Commerce and Industry), shopowners associations and light engineering and Bangladesh re-rolling mills associations voiced these views at an opinion- exchange meeting arranged by the National Board of Revenue (NBR) at the Diploma Engineers' Institute in the city. Finance minister AMA Muhith attended the meeting as the chief guest. FBCCI president AK Azad recommended enforcement of the new laws in phases with some corrections. He said the new law proposed jail penalty for VAT evaders which is insulting and offensive for businessmen. "The existing rule allows taxmen to search and freeze bank accounts of VAT evaders. The new rule of jail and penalty provisions should be withdrawn," he said. The apex chamber leaders appreciated the NBR's effort on preparing a comprehensive VAT law. Amir Hossain Khan, president of the Bangladesh shop-owners association, said the new VAT law is not required as the existing VAT law was enforced only 20 years back and it is working smoothly. "People understand the existing VAT law now and it has been implemented successfully," he said. Abdur Razzak, president of the Bangladesh light engineering association, said small and medium industries will face a serious setback following the enforcement of the new law. "The draft law has proposed withdrawal of truncated VAT system which will affect small and medium businesses. These businesses cannot keep transaction records," he said. This law may trigger mass agitation, he said adding that the government would have to rethink before enforcing the new law, he said. Finance minister AMA Muhith said he is surprised at the reaction of the businessmen to the new VAT law as the move on preparation for the new Vat law was launched in fiscal 2009-2010. He said the government would arrange a workshop with the businessmen to discuss the new VAT law. Muhith termed the truncated VAT system as 'discretion-based' and stressed the need for withdrawal of it. Bangladesh re-rolling mills association secretary general Abu Bakar Siddique urged the government to continue tariff value and collect income tax at production stage like VAT. FBCCI adviser Manzur Ahmed strongly opposed the new law, saying 'existing law is working superbly'. He stressed the need for impact assessment of the new VAT law by forming a national committee with private partnership. Beximco group deputy chairman Salman F Rahman said the government must be careful on preparing such laws. It might create serious repercussion among businessmen, he said. "I got scared when I came to know about the changes in the new VAT law. The government and businessmen should sit together to discuss it," he said. NBR chairman Dr. Nasiruddin Ahmed assured the businessmen of revisiting the draft VAT law after consultation with the businessmen. "The revenue board will be careful in preparing new VAT law. The board will arrange a workshop soon to discuss it with the businessmen," he said. Barrister Jahangir Hossain, commissioner of the Large Taxpayers Unit VAT, gave a presentation describing the 31-point major changes under the proposed VAT law.