VAT system needs overhauling to remove distortions
Friday, 15 October 2010
FE Report
The Value Added Tax (VAT) system needs overhauling to remove distortions that have made its implementation difficult, said Dr. Zahid Hossain, a senior specialist at the Asian Development Bank (ADB) mission in Bangladesh.
"Time has come to take a fresh look at the VAT system," he said.
He identified imperfections or distortions in VAT system relating to determination of tariff values and specific rates.
Hossain said some 'excise specific feature' of VAT created difficulties in implementation of the system.
He made these observations at a seminar arranged by the Institute of Chartered Accountants of Bangladesh (ICAB) in the city Thursday.
Initially, there were few distortions in the system, but over the time these have proliferated, he said.
He said members of the ICAB can play a significant role in addressing the problems.
Hossain underscored the need for closer co-operation between business, trade and accounting profession and the VAT authorities.
Md. Shahjahan Majumder, acting president of ICAB, urged the authorities concerned to utilise the services of professional chartered accountant to familiarise VAT system.
He proposed the government to introduce the certification of VAT returns for at least large taxpayers.
Dr. MD. Abdur Rouf, joint commissioner of VAT, presented a keynote paper at the seminar.
In his keynote paper, he focused on advantages and disadvantages of VAT system.
He said the VAT system will be cleared of distortions after introduction of digitalised system.
The Value Added Tax (VAT) system needs overhauling to remove distortions that have made its implementation difficult, said Dr. Zahid Hossain, a senior specialist at the Asian Development Bank (ADB) mission in Bangladesh.
"Time has come to take a fresh look at the VAT system," he said.
He identified imperfections or distortions in VAT system relating to determination of tariff values and specific rates.
Hossain said some 'excise specific feature' of VAT created difficulties in implementation of the system.
He made these observations at a seminar arranged by the Institute of Chartered Accountants of Bangladesh (ICAB) in the city Thursday.
Initially, there were few distortions in the system, but over the time these have proliferated, he said.
He said members of the ICAB can play a significant role in addressing the problems.
Hossain underscored the need for closer co-operation between business, trade and accounting profession and the VAT authorities.
Md. Shahjahan Majumder, acting president of ICAB, urged the authorities concerned to utilise the services of professional chartered accountant to familiarise VAT system.
He proposed the government to introduce the certification of VAT returns for at least large taxpayers.
Dr. MD. Abdur Rouf, joint commissioner of VAT, presented a keynote paper at the seminar.
In his keynote paper, he focused on advantages and disadvantages of VAT system.
He said the VAT system will be cleared of distortions after introduction of digitalised system.