New VAT rate to be lower than 15 percent

Finance Minister Abul Maal Abdul Muhith has agreed to listen to the demands of businesses and levy a lower VAT rate.

Staff Correspondentbdnews24.com
Published : 10 May 2017, 01:43 PM
Updated : 10 May 2017, 01:43 PM

Muhith informed the media of the decision during the inauguration of the National Board of Revenue’s VAT Online Mobile Help Desk on Wednesday.

He took issue with reports that the government had compromised on its initial proposal of a 15 percent VAT, but indicated that its stance had softened.

The finance minister did not, however, indicate what the new VAT rate would be, but added that details would be available in his next budget speech.

Asked if he would say he was open to making the new VAT more ‘comfortable’ for businesses, Muhith said: “Yes, that is right. That is all.”

The new VAT has been a contentious issue for the finance minister, leading to a heated confrontation between him and members of the Federation of Bangladesh Chambers of Commerce and Industry on Apr 30 over the rate of the tax.

The government had intended to implement the Value Added Tax and Supplementary Duty Act of 2012 from July 1 of last year, but scrapped the plan following intense protests by the trade bodies.

It was later announced that the VAT would be set at 15 percent and would come into effect from Jul 1, 2017.

But businesses have opposed the implementation of the law, asking for the revised rate to be set between seven and 10 percent.