Bangla govt backtracks, new VAT not until 2017
Faced with resistance from businesses, a section of revenue officials and inadequate preparation by the National Board of Revenue (NBR), the Bangladesh government has backtracked on its move to implement the new VAT law from the start of the new fiscal year, according to media reports.
In his budget speech in Parliament on Thursday, Finance Minister AMA Muhith said that the VAT and Supplementary Duty Act 2012, which envisages a universal 15 percent VAT rate, have been rescheduled to be effective from July, 1 2017.
“Unfortunately, the necessary preparation for achieving the above objective is far from satisfactory. Under the above circumstances, government has decided not to fully implement the new act from the next financial year,” Muhith said in his speech.
Instead of going ahead with the new law, Muhith sought to increase VAT for various goods and services including small businesses, particularly shop owners who have been demanding of continuation of package or fixed VAT.
“Our objective to implement the new act has not changed, we will only implement the new Act after one year,” he told the parliament. This would be second year the government backtracked on its stance to enforce the law that will replace the VAT law of 1991.
Businesses have demanded implementation of recommendations of a panel, formed by the government in 2014 by including their representative. The committee suggested multiple rates for VAT on goods and services.
Among other things under the proposed new law, fabrics manufactured by hand-run looms will enjoy VAT exemption, but the fabrics made through power looms will have to pay the VAT from the next fiscal. (SH)
Fibre2Fashion News Desk – India