Finance Minister AMA Muhith on Tuesday said the government has decided to implement the Value Added Tax (VAT) Act 2011 fully within a year.
“The process to implement the law will begin shortly and cooperation from everyone is very much important in this regard. Though there’re objections, no law can be better than this one,” he said.The Finance Minister came up with the remarks at the 36th consultative committee meeting of the National Board of Revenue (NBR) jointly organised by NBR and the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) at a city hotel.
State Minister for Finance and Planning MA Mannan, NBR chairman Nojibur Rahman, FBCCI first vice-president Monowara Hakim Ali, BGMEA president Atiqul Islam, representatives of different ministries also spoke at the programme.
He said the total revenue income of the country is nearly 11 percent of the Gross National Income (GNP), which is quite low.
“The total revenue collection of the country was only 5 percent of the national income in 1983 and it took almost 27 years to take it to 8 percent. The incumbent government has increased the revenue collection by 3 percent to make it 11 percent in the last six years,” Muhith added.
The Finance Minister also said the government has a target to boost the revenue collection by another 3 percent income over the next four years.
Expressing his disappointment, Muhith said although there are 16 crore people in Bangladesh, only 11 lakh of them actually pay taxes. Nearly 18-20 lakh citizens can pay taxes.”
“Though it is an over ambitious thinking, at least 50 percent of the population should be brought under any form of tax,” Muhith said adding that around 32 percent of the people in neighbouring India while 22-24 percent in Nepal pay taxes.
FBCCI president Kazi Akram Uddin Ahmed thanked Prime Minister Sheikh Hasina along with Indian Prime Minister Narendra Modi for their respective roles in having the landmark constitution amendment bill on Land Boundary Agreement (LBA) passed in Indian parliament as it will boost the border trade between two countries.
Referring to the recent political turmoil, he said it is needed to restore the confidence of the investors for in the national interest as the investors could not regain the self-confidence for making long-term investments.
Kazi Akram later submitted the recommendations and demands of the apex trade body for incorporating those in the budget for fiscal year 2015-16 laying emphasis on import duty, VAT, and income tax.
He proposed fixing unconditional 1 percent import duty on capital machinery and basic raw materials, 3 percent on interim raw materials, 10 percent on locally produced intermediary raw materials and most important consumer items, and 25 percent duty on produced and luxurious items (with regulatory duty).
FBCCI recommended increasing the individual tax free income limit from Tk 2.20 lakh to 2.75 lakh, raising the tax free ceiling for women from Tk 2.75 lakh to Tk 3.25 lakh, for the disabled from Tk 3.5 lakh to Tk 4 lakh and for the wounded freedom fighters from Tk 4 lakh to Tk 4.5 lakh.
It also recommended keeping the deduction of tax at source for all kinds of exports at 0.3 percent. – UNB