Businesses need to be heard as VAT Act failed to meet prospects
COUNTRY'S apex trade body on Saturday termed the SD and VAT Act 2012 a flawed law and alleged that it went against the national interest. The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) said the law has complicated the taxation system instead of simplifying the measures and failed to expand the tax net. The trade body leaders also demanded an investigation into the failure in widening the tax net by the NBR although a substantial amount of money has already been spent as consultancy fee for introducing the multiple VAT rate.
The multiple VAT rates were finally introduced in 2019. However, the FBCCI President alleged that the tax net could not be expanded and the tax-GDP ratio remained static at 9.0 per cent, the collection system has not been eased and the incidents of harassment to the business community increased. The VAT system became more complicated although the NBR spent a lot of money on consultants for easing the system. It is feared that the implementation of the new provisions in the VAT law will hurt small businesses as they are already weakened due to the Covid-19 pandemic. If it is too late to withdraw the proposed changes in the VAT law, these small businesses have to suffer a lot. The apex business body observed that the banks are showing reluctance to provide loans to the cottage, small and medium enterprises under the government-announced stimulus packages.
FBCCI demanded the withdrawal of government deposits from banks, if (the banks) do not cooperate with the entrepreneurs in implementing the stimulus package. The stimulus packages are revolving fund; it will increase investment in the private sector. However, the FBCCI hopes that small businesses will graduate by 2023 simultaneously when Bangladesh will graduate from least developed country status. The government should consider the FBCCI concern in tax and VAT collection, as the apex body represents country's trade, manufacture and business.