Loading...
The Financial Express

NBR now hints at VAT Package

| Updated: April 10, 2019 18:11:54


NBR now hints at VAT Package

The proposed new VAT law may have a 'Package VAT'-like system as the National Board of Revenue (NBR) has shifted from its position to scrap the provision.

NBR chairman Md Mosharraf Hossain Bhuiyan said it was earlier decided not to keep the package VAT system, but there would be something like that in the next budget.

He said this at a pre-budget meeting with think tanks, economists, research and professional bodies on the NBR premises on Tuesday.

The VAT law is set to take effect from July 01, 2019.

Small and medium businesses in Dhaka and Chattogram cities having annual value addition up to Tk 1,86,667 or annual sales up to Tk 0.7 million currently enjoy package VAT benefits.

They pay only Tk 28,000 annually for doing business.

At the meeting, representatives of the Centre for Policy Dialogue (CPD), PricewaterhouseCoopers (PwC), Bangladesh Economic Association (BEA) presented their respective proposals for fiscal year 2019-20.

Mr Bhuiyan said there would be multiple VAT (Value Added Tax) rates in the new law and the VAT-free threshold for small businesses would be revised upward.

"Let the VAT law be implemented first through the Finance Act. Major changes in the law could be applied later on ," he added.

The NBR will also incorporate some measures in the budget to reduce the mismatch between TIN (taxpayer identification number) holders and tax return filers.

Currently, the number of TIN holders is close to 4.0 million and that of return filers 1.6 to 1.8 million.

"We've started a survey to find out the non-filers. There will be a penal provision for non-compliance," the NBR chair said.

He vowed to offer uniform facilities, including bonded warehouse, to all the export-oriented sectors to bring them on to an equal footing with the ready-made garment sector.

Mamun Rashid, PwC managing partner, said tax on lower slab of cigarettes should be increased to stop illicit trading and abundance of cheap cigarettes in the market.

Sushmita Basu, partner and leader of PwC (tax and regulatory practice), suggested laying down the process of capital tax payment and incorporating presumptive tax on online sales.

She also sought steps to issue TINs to foreign companies having no permanent establishments here.

The PwC representatives also raised some issues relating to VAT agents, MRP (maximum retail price) for tobacco taxation, multiple VAT registration and sought some amendments to the transfer pricing law.

BEA president Dr Abul Barakat highlighted some major points from a 94-point proposal.He said some Tk 7. 0 trillion could be mobilised by tracing black money holders through devising effective measures.

Honest people should not be harassed in the process of searching for black money holders, he went on to say.

"There should be a clear guideline in the next budget to thwart capital flight," the noted economist stated.

He further said that the number of large taxpayers should be five times higher than the existing number.

Dr Barakat called for developing the bond market, raising the number of return filers, protecting local industries through tax measures and levying higher tax on the well-off section.

For women entrepreneurs, he suggested keeping to a micro-finance grant instead of a loan disbursement.

CPD senior research fellow Towfiqul Islam Khan said implementing a major reform is comparatively easier at the beginning of a political government's tenure.

"The government should make the changes in the VAT law clear and discuss those with the stakeholders to dispel confusion before its implementation," he said.

Mr Khan also suggested that the NBR frame a time-bound automation plan under the VAT law on a short-term basis.

The NBR is giving huge tax incentives, but there is no estimated value of these incentives to show them as a reason for revenue collection shortfalls, he said.

Mr Khan suggested that taxmen make e-TIN holders aware of submitting their returns by sending SMSs and emails to them.

He called upon the NBR for framing a property tax or inheritance tax law, terming the existing wealth surcharge an ineffective levy.

"The budget should be business-friendly, not businessmen-friendly…," the CPD fellow asserted.

He also proposed TDS (tax deducted at source) automation, netting of non-tax paying well-off people and setting datelines for the NBR's reform initiatives that are in the pipeline.

[email protected]

Share if you like

Filter By Topic