Business

VAT law to take effect from budget day

DHAKA, National Board of Revenue (NBR) Chairman Md Mosharraf Hussain Bhuiyan today said the new VAT law would be effective from the day of the budget announcement.

The budget becomes effective from the day of budget announcement. Implementation of some of the decisions becomes effective from the day of budget announcement. It will be applicable to the new VAT law, he said.

The NBR chairman said this while addressing a pre-budget meeting with the Economic Reporters Forum (ERF) at the NBR building in the city's Segunbagicha area.

NBR members Firoz Shah Alam and Kanan Kumar Roy, ERF President Saif Islam Dilal and General Secretary SM Rashidul Islam were present among others.

Mentioning that the highest VAT rate in the new law would remain 15 percent, Mosharraf said the finance minister has already fixed the new VAT rates after discussing with the businessmen, while the businessmen have also accepted the rates.

Urging the companies to be enlisted in the capital market to enjoy the corporate tax facilities, he said the corporate tax rate for the listed companies is 25 percent, while the rate is 35 percent for the non-listed companies.

Mosharraf said that if the companies think that their rates are high, then they could enlist in the capital market for enjoying less corporate tax rate.

The NBR Chairman said like other countries of the world, the corporate rate in Bangladesh for the listed companies is 25 percent while the rate is 35 percent for the non-listed companies.

He noted that around 60-65 percent of the country's overall revenue collection from tax comes from the corporate tax and it would not be beneficial for the country to bring an overnight change in this corporate tax rate.

We'll also have to think of the alternate source of revenue if the corporate tax rate is reduced, he added.

He said compensation would be provided for those investors who were affected in the capital market, but it is yet to be finalized who would get the compensation and in which method.

The NBR chairman said that strict enforcement would be ensured to stop taking TINs unethically and steps would also be taken so the TIN holders submit returns.

Noting that the NBR has come out of the culture of tax exemption, Mosharraf said, Tax exemption is in place only on one or two sectors. Besides, tax exemption is not given to any sector except for public welfare purpose.

The ERF gave a set of proposals to the NBR including simplification of the tax retaliated services, conducting publicity through SMS for creating awareness on tax, adopting reform initiatives for direct tax, making more effective the transfer pricing cell and strengthening the NBR research cell.

Source: Bangladesh Sangbad Sangstha (BSS)