NBR chairman rules out changing uniform VAT rate of 15pc [ Tritiyo Matra News ]

NBR chairman rules out changing uniform VAT rate of 15pc

Local March 25, 2016

The National Board of Revenue chairman Md Nojibur Rahman on Thursday ruled out any possibility of changing the uniform rate of 15 per cent value-added tax under the new VAT act despite the business community has continuously been demanding for lowering the rate to single digit.
‘There is no plan to change anything which is included in the law now when the revenue board is going to implement the uniform VAT rate from 1st July,’ he told reporters after the monthly luncheon meeting of the Foreign Investors’ Chamber of Commerce and Industry held at Pan Pacific Sonargaon Hotel in Dhaka.
The new VAT and Supplementary Duty Act-2012 will come into force from next fiscal year under which a uniform 15 per cent VAT will be applicable for all sectors.
At the function, FICCI demanded that the NBR reduce the rates of corporate tax, conduct customs valuation of imported products based on actual transaction value and solve problems related to investment in savings tools faced by investors.
In reply to a question regarding businesses’ demand for lowering the VAT rate, Nojibur said the NBR was now preparing a transition plan for next three months before the implementation of the law.
Under the plan, the revenue board will examine the changes needed for replacing the existing VAT act by new act and issues required special attention in implementation stage of the law, he said.
Finance minister Abul Maal Abdul Muhith and the NBR will soon sit with the stakeholders including the Federation of Bangladesh Chambers of Commerce and Industry and other trade bodies before finalising the plan, he said.
The trade bodies and business associations have been demanding to reduce the VAT rate and introduce multiple VAT rates considering the strength and weakness of different sectors.
Earlier, the Federation of Bangladesh Chambers of Commerce and Industry made a proposal for fixing the rate at 7 per cent.
Nojibur said that the government would have to sit with the trade bodies for listening their thoughts and what they want and then the findings would be reviewed before taking next steps for finalising the transition plan.
In reply to a question, he said that the NBR was now examining the actual situation of revenue collection and possibilities of achieving the target and next steps on reviewing the target would be taken based on the findings.
While speaking at FICCI luncheon meeting, the NBR chairman invited the foreign investors for making more investments in the country saying that the capital of foreign investors in Bangladesh is well protected and
the revenue board will take policy measures to resolve the problems faced by investors for creating a win-win situation for investors.
FICCI president Rupali Chowdhury stressed on a healthy dialogue with the foreign investors before taking any initiative on automation to avoid any kind of mistrust and misunderstanding.
She said actual transaction value should be the main method of valuation alleging that customs authority has been applying its discretionary power in valuation ignoring the actual transaction value of imported products after cancellation of the pre-shipment inspection in 2013.
She also urged the revenue board for reducing corporate tax rate saying that the rate is very high in Bangladesh while in ASEAN countries the rate is on an average 25 per cent.
She proposed to resolve problems on investment of gratuity fund and workers profit participation fund by investors.
NBR member (VAT policy) Jahangir Hossain, first secretary (income tax policy) Shabbir Ahmed, among others, spoke at the meeting while FICCI vice-president Kevin Lyon, executive director Jamil Osman and other members attended the luncheon.