Businesses and VAT (Value Added Tax) officials on Wednesday reached a consensus over the implementing the long-delayed VAT law from next fiscal year.
In a close-door meeting with the National Board of Revenue (NBR), the business leaders have expressed their positive views on the implementation of the new law through amendments.
A high-powered expert committee of the revenue board has proposed the amendments in its report submitted to the tax-collecting authority recently.
Earlier, both the NBR and businesses were rigid in their respective positions on some provisions in the new law.
To discuss the pros and cons of the report, the NBR arranged the meeting with the business leaders on its premises.
The leaders of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Bangladesh Chamber of Industries, Pipe Merchant Association, among others, attended the meeting.
NBR chairman Md Mosharraf Hossain Bhuiyan and FBCCI president Shafiul Islam Mohiuddin led their respective sides.
BCI trade policy adviser Manzur Ahmed said the VAT officials and businesses will sit again after a week studying the committee's report thoroughly.
"Initially, we have responded positively to the proposed amendments," he said without elaborating.
The proposed amendments of the committee are: Introduction of multiple rates of VAT, keep provisions of obtaining credit of the paid VAT, abolishing tariff value, and continuing the VAT registration process as per VAT law-1991.
Officials said the committee, in its report, had proposed keeping truncated value-based VAT rate unchanged with no rebate system.
Later, the proposal has been changed to multiple rates of VAT following instructions from the NBR high-ups.
Mr Manzur said the NBR seems to be flexible on amending the "tricky" provisions of the new VAT law that businesses had opposed earlier.
"I hope the amendments to the new VAT law might be placed for cabinet's approval by next month," he said.
NBR officials said a series of meetings will be held with the businesses leaders before the board finalises the amendments.
Parliament passed the new VAT and Supplementary Duty Act in 2012.
The implementation of the law has been deferred several times due to opposition from businesses.
In FY 2017, the government deferred its implementation by two years, until July 1, 2019.
Officials said the board will place the amendments of the new law before Parliament for its consent.
Mohammad Iqbal Zamal Jewel, co-convener of VAT sub-committee of the FBCCI, said businesses have assured the NBR of cooperation for the successful implementation of the new VAT law.
"We have proposed the VAT officials to set a sector-wise turnover limit for collecting VAT," he said.
The sudden implementation VAT at higher rates may hurt the businesses, he added.
In the meeting, both sides agreed to scrap the uniform rate of VAT at 15 per cent for all businesses and reduce the burden of Supplementary Duty on businesses.
