The National Board of Revenue (NBR) will sit with the policymakers and business leaders today (Wednesday) to discuss pros and cons of new VAT and SD law, 2012 in a bid to resolve confusion about implementation of the law.
The Value Added Tax (VAT) wing of the board will hold a seminar in the city where five ministers of the government, secretaries of the relevant ministries and leaders of the apex chamber body are expected to attend.
Finance minister AMA Muhith, commerce minister Tofail Ahmed, planning minister AHM Mustafa Kamal, food minister Md Qamrul Islam and industries minister Amir Hossain Amu are set to attend the programme.
The move came following a recent opposition of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) on replacement of the existing law with new ones from next fiscal year.
The FBCCI has suggested the NBR to amend the existing VAT law-1991 instead of scrapping it. They also alleged that recommendations of the business community are not considered on framing the new law.
The VAT and Supplementary Duty (SD) Act-2012 were passed by Parliament on November 27, 2012. The law is scheduled to come into effect from July 1, 2015.
Officials said the VAT wing identified that the existing law failed to create business-friendly environment.
The VAT wing will place a presentation in details about reasons for scrapping the current VAT law and introduction of a new one.
In the presentation, the NBR termed it 'impossible' to eliminate all faulty provisions from VAT law of 1991 in the existing structure.
The NBR framed the new VAT law under a banner 'ensure equity for all businesses-medium or large.'
In the presentation, to be placed today, the VAT wing has pointed out seven reasons on why the government decided to introduce a new law.
The limitations in the existing law include, disruption in maintenance of VAT chain due to existence of the truncated-base and tariff value system, limited scope for obtaining input credit, scope for harassment and corruption and complex system on payment of VAT.
The presentation paper said the new VAT law will offer special benefits for small business.
"There will be no VAT or turnover tax for businesses having annual turnover of maximum Tk 2.4 million. Businesses having annual turnover above Tk 2.4 million but not exceeding Tk 8.0 million have to pay only three per cent turnover tax," it said.
The new law has kept the provision to impose 15 per cent VAT on businesses having annual turnover above Tk 8.0 million, it said.
On the basic features of new act, the VAT department pointed out simplification of registration procedures under which one company needs to obtain only one registration number for its operation.
After introduction of the new VAT law, businesses will not face any hassle as there will be no provision on advance payment of VAT.
Businesses will also be able to claim VAT credit against paid VAT of their inputs or raw materials that they used on production.
"In the new law, prices of goods and services will be determined by seller and buyers as per market economy policy," the paper said. Currently, it is being fixed by the Vat authority.
The new law has the provision for single auditing system for company following complaints of the businesses on repetitive audit that hinders their smooth business operation.
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