The apex trade body of the country has termed the Value Added Tax (VAT) and Supplementary Duty (SD) Act-2012, as it is in its present form after changes to it, still 'not prepared' and 'much-lingered' in respect of its re-evaluation.
The comments of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) came in a recent letter to the chairman of the National Board of Revenue (NBR) just one month ahead of implementation of the law.
Referring to suggestions from economists and stakeholders, the chamber in the letter expressed the fear that implementation of the law in its present form might fuel inflation and go against the interest of the general people and also create resentment in society.
The apex chamber body took exception to the bypassing of the decisions that came from stakeholders' meetings during the last two years regarding changes to the law.
"There is a possibility that the law will spark resentment, if any provision incorporated into it goes against trade liberalisation and state-policy," the letter said.
Since 2012 the apex chamber body has been saying that the VAT-SD law in its existing form is in no way implementable in the country's socio-economic context, the letter has said.
The government deferred implementation of the new-look law in 2017 for two years following opposition from the business community.
The law in its latest form is now scheduled to come into force on July 1. But some fiscal measures in it would come into effect from the day of budget announcement, scheduled for June 13 as per Provisional Collection of Taxes Act 1931, NBR sources said.
In the letter the chamber body said a rebate system must be valid for the products that would enjoy multiple rates, otherwise it would fuel inflation.
The FBCCI said although implementation of the law had been deferred by two years, no visible steps had been noticed during the period to re-evaluate it.
"The FBCCI has been persuading the NBR to conduct an impact assessment of the new VAT law since 2017. On February 18, 2019, the chamber body again made a proposal to conduct a cost-benefit analysis considering time constraints which remained shelved," said the letter, signed by FBCCI Secretary General Hussain Jamil.
Responding to the FE's query regarding the FBCCI's letter, NBR Chairman Md Mosharraf Hossain Bhuiyan said the revenue board had incorporated a number of suggestions from the trade bodies into the law.
"We have raised the VAT exemption ceilings and turnover tax limit in line with the recommendations of the FBCCI," he said.
He also said the government made its position clear in the last budget consultative committee meeting with the FBCCI.
"We have taken adequate steps to make the new VAT law suitable for the general people," he said.
FBCCI President Shafiul Islam Mohiuddin said the chamber wanted that the government share the recent amendments and changes to the law.
The NBR skipped a scheduled meeting with the chamber regarding amendments to the VAT law, he said.
On May 2, 2019, a scheduled meeting on VAT law implementation and amendments between the NBR and the FBCCI was postponed. The FBCCI expressed its disappointment over postponement of the meeting despite issuing its notice.
The apex chamber said it was yet to get any of the minutes of the FBCCI-NBR meetings, held in the last two years regarding the VAT law or see any reflection of the meetings' decisions in it. The FBCCI safeguards the interest of its 484 member organisations ranging from small businesses to producers in all stages.
"Any law or policy of Bangladesh should be consistent with the government's Vision 2021 and 2041. The FBCCI does not support any policy that fails to integrate Bangladesh's vision," it said.
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