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Businesses give ultimatum to restore package VAT system

  • Published at 01:13 am November 3rd, 2016
Businesses give ultimatum to restore package VAT system
A platform under the name of “Bebosayi Oikkya Forum” held a rally in Dhaka’s Chawk Bazar area yesterday, protesting the new VAT law which has introduced a uniform 15% VAT on all types of products and services. The protesters made the ultimatum from the rally. The package VAT is a square foot-based rate which the small stores enjoy by paying VAT annually based on their shops’ locations and sizes, fixed by the National Board of Revenue. The government earlier targeted to implement the new VAT law from July 1, 2016. However, the enforcement of the law was postponed until July 1 next year after protests by business community. “We will go on tougher movement if the government does not meet our demands. We want to pay VAT, but we do not want to face any harassment,” said the Forum President Abdus Salam. “The government has increased package VAT for shops located in Dhaka and Chittagong city corporation areas to Tk28,000 from Tk14,000 for the current fiscal year. This is an additional burden on us,” he said. Forum Secretary Abu Motaleb alleged that a few of the government officials had managed to convince finance minister to introduce new VAT law and create more chances for corruption despite prime minister’s directive not to harass businesspeople. Motaleb, also a director of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), urged the government to reinstate the package VAT system to save local industry. “We did not pay VAT for a bread of Tk100 earlier, but now we will have to pay VAT for under the new law. This system will affect the living of poor people,” he said. Abu Motaleb said: “We are already facing a competition with the products being imported from India, China and Myanmar. Increased VAT will be another blow to the existing situation.” The new VAT law has already drawn widespread criticism from different quarters, mostly from leading business associations. The law will have no provisions for package VAT or the truncated value-based VAT system. With the introduction of the law, all levels of business will have to pay a unique and single VAT rate at 15%. Earlier on October 30, small and medium businesses organised a protest rally in front of FBCCI building in Dhaka demanding restoration of the package VAT system. For the current fiscal year, the government has increased package VAT for shops located in Dhaka and Chittagong city corporation areas to Tk28,000 from Tk14,000.