Old Dhaka businessmen call for simplification of tax, VAT system

Representatives of the sectoral trade associations of old Dhaka have emphasized simplification of the tax and VAT system for facilitating trade and commerce.
 
They also called upon the government for easing further traffic congestion, improving further the law and order situation especially to control the juvenile gangs, imposition of duty on tariff value of imported products, reduction of VAT rate, stopping the misuse of import under bond license facility, reducing government's expenditure and automation and simplification of process at the ports and introduction of package VAT system on essential commodities to contain inflation.
 
The Old Dhaka businessmen representing small and medium enterprises made the call at a view exchange meeting organised by Dhaka Chamber of Commerce and Industry (DCCI) held today at a community centre in the city's Lalbagh area.

The DCCI held the view-exchange meeting with the Old Dhaka businessmen to identify and resolve the problems faced by the Old Dhaka traders, especially by the small entrepreneurs of that area.

The entrepreneurs said they have been facing various challenges in recent times due to unbearable traffic congestion, water logging, weak infrastructures, inadequate access to finance to SMEs, over law and order situation and Dollar price, delay in import and export procedures, high rate of interests on loans, increased VAT and tax rates and a bit complex revenue structure, said a DCCI press release. 

The business leaders of different specialized associations of Old Dhaka and representatives of several other business organizations participated in the meeting. 

Deputy Commissioner of Dhaka Metropolitan Police (Lalbagh Division) Md. Jashim Uddin, Director (Research), Chief Economist's Unit of Bangladesh Bank (BB) Dr. Md. Selim Al Mamun and Additional Commissioner Customs, Excise and VAT Commissionerate (South, Dhaka) of NBR Manash Kumar Barman were present at the occasion as special guests.

DCCI President Taskeen Ahmed, in his welcome speech, stressed the need for simplifying the tax and VAT system as well as simplifying the system according to the size, nature and capacity of the businesses, removing complexity and bottlenecks in the import-export procedures, and fixing a realistic VAT rate. 

He said despite being one of the ancient business hubs for trade and commerce for more than hundreds of years, the entrepreneurs of Old Dhaka have been facing various problems due to increasing traffic congestion, lack of infrastructures, tax and VAT issues. 

In order to solve these problems, joint initiative is needed both from the government and the private sector, he added. 

Taskeen also said that for a business-friendly environment, improving the law and order situation is a must.
 
Dr. Md. Selim Al Mamun said that during 2022 to 2024, the dollar rate depreciated by 35 per cent in the local market and it caused instability in currency management, but the central bank is now working to restore stability of the exchange rate. 

Imports and exports have increased by 3.5 per cent and 10.9 per cent respectively in the last six months and remittances have reached US$16 billion in the last seven months, he said. 

Mamun said the Bangladesh Bank has already formed a taskforce to bring back the siphoned-off money. 

Manash Kumar Barman said the government has already taken initiative to automate the VAT system through VAT online registration process in a bid to easing the VAT payment return system and reduce harassment. 

He urged the entrepreneurs not to pay VAT to anyone without receipt.

Mentioning that there is a misconception about VAT, Manash clarified that for traders, VAT is always calculated based on product's value addition not on the manufactured price. 

Md. Jashim Uddin said that traffic police would be deployed at eight important spots to ease traffic congestion in Old Dhaka, but also urged the businessmen to come forward to recruit volunteers with them as well.
 
He informed that a number of roads in Old Dhaka would be made one-way soon to ease traffic congestion. 

Matiur Rahman, former president of DCCI, suggested that considering the economic situation of the country, it is necessary to reduce the LC margin irrespective of bank-client relationship.
 
Manwar Hossain, chairman of Anwar Group of Industries and former director of DCCI, stressed the need for widening the tax net by reducing the tax rate as well as rationalizing the tax rate.
 
Alhaj Abdus Salam, former senior vice-president of DCCI, said due to unbearable traffic congestion, the sales of old Dhaka traders are continuously decreasing, while they are also facing increasing losses due to high rate of tax and VAT and the complexity of revenue management.

DCCI Vice-president Md. Salem Sulaiman and Members of the Board of Directors were present on the occasion. 

At the end of the event, DCCI President Taskeen Ahmed handed over DCCI's membership certificates to some 33 newly enrolled members of the DCCI.