Muhith meets PM Hasina Thursday to discuss new VAT rate

Finance Minister AMA Muhith will sit with Prime Minister Sheikh Hasina on Thursday to finalise the new rate of value-added tax or VAT to follow up on his promise to cut it.

Senior Correspondentbdnews24.com
Published : 24 May 2017, 04:39 PM
Updated : 24 May 2017, 04:39 PM

Speaking to reporters at the secretariat on Wednesday, he said it was 'very difficult' to cut the rate.

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

The rates of package VAT were raised instead. The new law keeps the VAT rate flat at 15 percent, eliminating different slabs.

Since then, the finance minister has been saying the law will be implemented from July 1 this year.

But when the businesses threatened to demonstrate against the plan again, Muhith said a reduced but uniform tax rate would be finalised on Thursday or Friday.

Asked about progress in fixing the new VAT rate on Wednesday, the minister spoke about his plan to meet the prime minister.

By one estimate, the government will have to count Tk 80 billion in lost revenue if the VAT rate is reduced by 1 percentage point from 15 percent. A 3 percentage-point cut in VAT will amount to a loss of Tk 240 billion. 

Asked about the matter, Muhith said: "It (lost revenue) is a big amount."