New VAT law to become effective from July 1: Kamal

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DHAKA, March 31, 2019 (BSS) – Finance Minister AHM Mustafa Kamal today
reiterated that the new VAT law would come into effect from the first of July
in the next fiscal year with three different VAT rates.

“We’ll implement the VAT law from first of July and there is likely to be
3 different VAT rates –5 percent, 7.5 percent and 10 percent,” he said.

The Finance Minister said this while giving his introductory remarks at a
view exchange meeting with the private sector regarding VAT and other
contemporary issues held at the NEC-2 Conference Room in the city’s Sher-e-
Bangla Nagar area this afternoon.

PM’s Adviser on Private Industry and Investment Salman F Rahman, the
National Board of Revenue (NBR) Chairman Md Mosharraf Hussain Bhuiyan,
Finance Secretary Abdur Rouf Talukder, FBCCI President Shafiul Islam
Mohiuddin, FBCCI Senior Vice President Sheikh Fazle Fahim and other business
leaders were present.

After the meeting, Kamal told reporters that the business community has
agreed in principle about the three new VAT rates.

Kamal also informed that the budget for the next fiscal year would be
placed in parliament on June 13.

He said that in the next budget, there would be no such thing which would
affect the businessmen.

NBR Chairman Md Mosharraf Hussain Bhuiyan said that the VAT exemption
threshold would be raised from the present Taka 36 lakh while the turnover
tax would be more rationalized so that the business community feel more
encouraged to pay VAT.

Earlier in his introductory speech, Kamal mentioned that the government does
not want to make any delay regarding implementation of the new VAT law,
adding the government rather wants to implement the new VAT law taking
alongside the businessmen and the concerned stakeholders.

He assured the businessmen that the government would implement the VAT
law in a transparent way without harassing them.

The Finance Minister said initially some 50,000 Electronic Fiscal Devices
would be launched to collect VAT while one revenue officer would be engaged
for every 10 machines to properly monitor the collection of VAT.

He said gradually VAT would be imposed on the capable establishments in
all the growth centres across the country, especially on those business
houses who have capacity to pay VAT.

“We’ll collect VAT to that extent so that the consumers would be able to
tolerate, we won’t put extra pressure on them……..it will be very
flexible, I’m very sure it will serve your purpose,” he added.

The Finance Minister said there are still many people in the country who
do not pay tax despite having the capacity.

Regarding the new VAT law, Kamal said that he would welcome the
suggestions of the business community, but would not accept such motion that
the VAT law would not be implemented.

He also cited that only 15-16 lakh people in the country pay tax where
there are some 4 crore middle class people in the country.

In order to address the Non Performing Loans (NPLs), Kamal said that the
interest rate should have to be a competitive one so that the loan recipients
reach into a comfortable position to pay their debts.

NBR Chairman said the government wants to implement the VAT law from the
next fiscal year to infuse dynamism in the business operations and thus
boosting revenue collection.

He said that in the new VAT law, there will be no truncated VAT rate as
well as there will be a provision for giving rebate in some sectors.

The NBR Chairman also informed that there might be some exceptional rates
on two or three areas.

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