The government is finally going to introduce a single rate of value added tax (VAT) from July 2016 replacing the existing multiple rates.
Finance minister AMA Muhith said at a meeting to motivate the taxpayers at Diploma Engineers Institute in Dhaka on Wednesday.
Multilateral agencies, particularly International Monetary Fund (IMF), have been pressing the government to keep a uniformed VAT rate – at 15 percent – despite the opposition from the businessmen who are demanding multiple rates.
“Though businessmen prefer multiple rates of VAT, but the global practice is a single rate and it has many more advantages. That’s why we plan to introduce a single rate of VAT,” he said.
Organised by the National Board of Revenue (NBR), the meeting was also addressed by FBCCI president Kazi Akram Uddin. NBR chairman Nojibur Rahman presided over the meeting.
The finance minister said despite the government’s decision, discussion will continue with the business community to bridge the gap with them in this regard.
Defending the government’s stance on introducing a single rate of VAT, Muhith said: “If the rate is single, then it has lot of advantages. We can maintain the inventory easily as to how much money is coming from which source. The global practice is also the same.”
A new VAT law was passed in parliament in November 2012 to introduce a single rate of such tax, but the law could not come into effect because of opposition from the businesses.
Emphasising the need for raising tax collection for increasing the size of the national budget, Muhith expressed the hope that the annual outlay will more than double by 2019-20.
Kazi Akram Uddin said the NBR would have to take initiative to encourage the micro and small entrepreneurs to pay tax like they encourage large taxpayers.
Source: Prothom Alo
