Finance Minister Abul Maal Abdul Muhith declared in his
budget speech in Parliament on Thursday that the VAT and Supplementary Duty Act
2012 would be enforced in FY 2017-18 to collect 15 percent VAT.
He was presenting a Tk 3.41 trillion budget.
Business leaders have been strong in their opposition to the
proposal, threatening to go on strike if it was passed.
In his budget speech, the minister said the Act was adopted
in 2012 after much deliberation. But the new system for enforcing VAT at every
stage of production demands that goods and services providers keep proper
accounts at the lower tiers, he said.
“Unfortunately, the necessary preparation for achieving the
above objective is far from satisfactory.
“Under the circumstances, the government has decided not to
fully implement the new Act from the next financial year. Rather, the
government has decided to fully implement the new Act from July 1, 2017”
#VAT and Supplementary Duty Act from 2012 could not be
implemented due to pressure from businesses. #The law calls for imposing 15 percent VAT on all
businesses, big and small, but exempts those with an annual turnover of less
than Tk 3 million. #Businesses, opposing 15 percent tax on sales, favour the
‘package VAT’ system set by the NBR based on type and location of the business.
The highest VAT amount under this system in Dhaka and Chittagong cities is Tk
14,000. |
Revenue target for the new fiscal year has been set at Tk
2.42 trillion, and the finance minister hopes VAT will supply 727.6 billion,
which is 35 percent higher than the last fiscal.
