NBR may raise upper limit of turnover for VAT imposition

The National Board of Revenue may increase the upper limit of turnover from the existing Tk 80 lakh for imposing turnover VAT on businesses in a bid to implement smoothly the new Value-Added Tax and Supplementary Duty Act-2012 from the next fiscal year.
The board is also considering incorporating some of the sensitive items in the list of VAT exemption keeping the VAT rate unchanged at 15 per cent in the new VAT act to ease pressure of burden of VAT on consumers, officials said.
They said that the NBR at its latest budget implementation forum meeting took the decisions and assigned the VAT Online Project (VOP) to examine the issues with consultation with the business community.
Trade bodies including the Federation of Bangladesh Chambers of Commerce and Industry and the Bangladesh Shop Owners Association have been protesting at the decision of the government of imposition of VAT at uniform 15 per cent and demanding the ceiling of turnover to be raised Tk 1.5 crore.
Businesses particularly shop owners and small traders are expressing apprehension that uniform VAT rate and lower turnover limit for turnover VAT will increase the prices of products, causing additional burden on consumers.
It will also reduce the competitiveness of honest traders if all the traders are not brought under the VAT net, they said.
According to the new act, businesses having annual turnover between Tk 30 lakh to Tk 80 lakh will have to pay turnover VAT at the rate of 3 per cent while there will be no VAT on small businesses having annual turnover below Tk 30 lakh.
Businesses having annual turnover above Tk 80 lakh will have to pay 15 per cent VAT once the new act comes into effect.
However, consumers always pay the VAT along with the prices of products and services while traders just collect the VAT on behalf of the NBR and deposit to the government exchequer.
The new VAT act was supposed to come into effect from July, 2016 but the government deferred the deadline amid protests from businesses and lack of preparation of VAT officials to implement the act from the scheduled timeframe.
Finance minister Abul Maal Abdul Muhith in his budget speech for the ongoing fiscal year declared to implement the law from July, 2017.
Officials of the VAT wing of the NBR said that they would also start dialogue soon with the businesses
across the country to resolve the disputes over the VAT act.
VOP will also provide trainings to traders over implementation of the new VAT act, they said.
At the meeting, the revenue board also reviewed the outcome of the strategic planning exercise (SPE) with the VAT officials in Cox’s Bazar.
At the SPE, three sub-groups — automation, organisation and law and rules matter — have also been formed in a bid to implement the law smoothly.

News Courtesy: www.newagebd.net