FBCCI seeks permanent restoration of package VAT system in law [ Tritiyo Matra News ]

FBCCI seeks permanent restoration of package VAT system in law

Local September 28, 2016

The Federation of Bangladesh Chambers of Commerce and Industry has again placed a set of demands related to value-added tax, customs duty and income tax to finance minister Abul Maal Abdul Muhith for consideration.
The apex trade body claimed that regular trade and business activities of small and medium entrepreneurs and traders were being affected as the National Board of Revenue did not consider the major and sensitive budgetary proposals of the trade body during the budget for the current fiscal year passed in parliament in June.
The demands include inclusion of package VAT system and previous rate permanently in the new VAT and Supplementary Duty Act with annual increase and fixing the limit of annual turnover between Tk 36 lakh and Tk 5 crore for small and medium enterprises and services sector for imposing 3 per cent turnover tax.
The revenue board in the budget for the current FY 2016-17 scrapped the turnover facility for manufacturers in Dhaka and Chittagong metropolitan areas and fixed package VAT at Tk 28,000 for businesses having annual turnover below Tk 80 lakh.
Now, the package VAT and turnover facility has become ineffective even for shopkeepers in the metropolitan areas because of the changes, the trade body claimed.
There is also a provision of turnover of tax at the rate of 3 per cent for businesses having annual turnover between Tk 30 lakh and 80 lakh. VAT rate for businesses having turnover above Tk 80 lakh is 15 per cent with tax rebate benefits.
In the new VAT act to be introduced from July, 2017, there will be no package VAT system.
The FBCCI on September 8 placed the demands at a meeting with finance minister and claimed that the tax measures created complexities and harassment in field-level business operation.
The association took proposals from 44 business associations across the country to prepare the proposals.
Muhith has forwarded the proposals of the FBCCI to the NBR and instructed the tax authority to closely examine the demands and place a report to him.
The FBCCI also demanded to fix the turnover tax at the rate of 4 per cent for businesses having annual turnover above Tk 5 crore but has no ability to claim tax rebate.
It said that the burden of VAT at consumer level will be reduced to 0.50 per cent to 4 per cent instead of 15 per cent if the proposals are considered.
The FBCCI leaders also demanded for allowing VAT exemption to handmade bread valued upto Tk 100 per kilogram and plastic and rubber slipper price up to Tk 120 per pair.
It also proposed to reduce VAT on service charge of repairing and servicing of motorized vehicles, transportation of goods other than energy products and information and communication technology.
The FBCCI proposed to waive VAT deducted at source from export-oriented industry.
The federation also demanded withdrawal of advance income tax imposed on import of basic raw materials and intermediate raw materials to facilitate investment and employment in the country.
As an alternative, a maximum 1 per cent AIT can be imposed with the provision of adjustment, it said.
It also demanded for withdrawal of AIT on local letter of credit worth Tk 5 lakh opened for purchasing goods.
NBR officials said that they were examining the proposals and a report will be prepared based on the examination which will be sent to finance minister for his consideration.