Finance minister Abul Maal Abdul Muhith has agreed to raise the value-added tax-free annual turnover threshold for traders to Tk 36 lakh from Tk 24 lakh, following recommendations from the VAT Act-2012 review committee, officials of the National Board of Revenue said.
In a recent instruction to the revenue board, finance minister also gave positive nod to some other recommendations of the committee, including exclusion of relatives as an aide of VAT dodgers, they said.
Muhith, however, did not decide as yet on introducing multiple VAT rates instead of imposing the flat 15 per cent for all sectors set in the law.
The committee, formed by the revenue board on October 24, 2014, consists of representatives of the NBR and business community, following a directive from the finance minister to review the act approved by the parliament on November 27, 2012. The business community had been opposing some of its provisions, including introduction of flat VAT rate.
The new act is slated to be implemented from July 2016.
The Federation of Bangladesh Chambers of Commerce and Industry, however, on Monday demanded the government implement the recommendations agreed by all members of the committee, from the upcoming fiscal 2014-2015.
FBCCI, the apex trade body, wrote a letter to Muhith demanding immediate implementation of the recommendations.
The committee on January 8 submitted the report to the finance minister and revenue board chairman.
The report recommended 10 major changes in the law.
Representatives of the revenue board and the FBCCI, however, expressed differing opinions on five recommendations.
Both the parties, however, agreed to raised VAT-free turnover limit and introduce multiple VAT rates.
Officials said that finance minister observed that the issue of introducing reduced VAT rates was problematic, although important in finalising the act for implementation.
A mission of International Monetary Fund will visit Bangladesh late February to review the implementation progress of the law.
After meeting with the IMF mission, the decision regarding reduced VAT rates would be finalised, they said.
Muhith also agreed on a recommendation of the committee for not providing VAT rebate on immovable properties on which the representatives from the FBCCI and the NBR expressed differing opinions.
In the letter, FBCCI also urged the finance minister for immediate steps to decide on the recommendations on which the revenue board and FBCCI representatives differed.
The responsibility may be given to the NBR chairman for resolving the issues through discussion with stakeholders, it said.
FBCCI observed that the VAT act should not negatively affect the country’s manufacturing sector.
-With New Age input