TCB may get tax waiver on five essential items
Thursday, 13 August 2009
Doulot Akter Mala
The government is contemplating offering tax-exemption to the state-owned Trading Corporation of Bangladesh (TCB) for procurement of five essential commodities and sell those at fair prices in Ramadan.
The National Board of Revenue (NBR) is examining the proposal of TCB that has sought exemption of VAT and advance income tax (AIT) levied on those products when purchased from the dealers.
The commodities include edible oil, pulses, onion, sugar and gram, which are mostly in demand during Ramadan. Consumption of those essentials shoots up sharply in Ramadan resulting in abnormal price hike every year.
TCB has requested the government to waive 4.0 per cent Value Added Tax (VAT) and 2.25 per cent AIT on those products that have to be paid at the time of purchase from local suppliers.
When suppliers quote prices for any of the essential items, they include VAT and AIT on top of the purchase price.
Prices of those five essential products will be reduced by 6.25 per cent if revenue board withdraws the tax, said a senior official of TCB.
The TCB is expected to start selling essentials at fair prices from the first day of Ramadan, he said.
"The board is examining the proposal of TCB and reviewing the matter seriously within a shortest possible time as Ramadan is knocking at the door," said NBR Chairman Nasiruddin Ahmed.
The board will take its final decision next week after analyzing TCB request, he said.
"Some of those commodities have been enjoying tax waiver at import stage. Exemption of local taxes needs more scrutiny," the NBR chief said.
The NBR is now assessing revenue loss as this will be the first of its kind tax-exemption on supply side of essential products, said a senior official of Vat department.
The revenue board has waived taxes on import of essential commodities earlier but it never offered such exemption for procuring products from the domestic suppliers, he added.
"But the revenue board might offer the facility for the greater interest," he said expressing his doubt over reining in prices of essentials in Ramadan through this measure.
Meanwhile, TCB also sought withdrawal of 7.50 per cent tax on dealers' commission.
The government is contemplating offering tax-exemption to the state-owned Trading Corporation of Bangladesh (TCB) for procurement of five essential commodities and sell those at fair prices in Ramadan.
The National Board of Revenue (NBR) is examining the proposal of TCB that has sought exemption of VAT and advance income tax (AIT) levied on those products when purchased from the dealers.
The commodities include edible oil, pulses, onion, sugar and gram, which are mostly in demand during Ramadan. Consumption of those essentials shoots up sharply in Ramadan resulting in abnormal price hike every year.
TCB has requested the government to waive 4.0 per cent Value Added Tax (VAT) and 2.25 per cent AIT on those products that have to be paid at the time of purchase from local suppliers.
When suppliers quote prices for any of the essential items, they include VAT and AIT on top of the purchase price.
Prices of those five essential products will be reduced by 6.25 per cent if revenue board withdraws the tax, said a senior official of TCB.
The TCB is expected to start selling essentials at fair prices from the first day of Ramadan, he said.
"The board is examining the proposal of TCB and reviewing the matter seriously within a shortest possible time as Ramadan is knocking at the door," said NBR Chairman Nasiruddin Ahmed.
The board will take its final decision next week after analyzing TCB request, he said.
"Some of those commodities have been enjoying tax waiver at import stage. Exemption of local taxes needs more scrutiny," the NBR chief said.
The NBR is now assessing revenue loss as this will be the first of its kind tax-exemption on supply side of essential products, said a senior official of Vat department.
The revenue board has waived taxes on import of essential commodities earlier but it never offered such exemption for procuring products from the domestic suppliers, he added.
"But the revenue board might offer the facility for the greater interest," he said expressing his doubt over reining in prices of essentials in Ramadan through this measure.
Meanwhile, TCB also sought withdrawal of 7.50 per cent tax on dealers' commission.