Muhith asks NBR to expand VAT net
Expressing resentment over the low number of business houses which file value-added tax (VAT) returns in the country, finance minister AMA Muhith yesterday said that bringing all the eligible organisations under the VAT net was the main challenge for the government.
Only 60,000 business organisations now submit VAT returns with the National Board of Revenue (NBR), though there are at least 3 to 6 lakh businesses in the country which ought to pay VAT, he said at an awards ceremony in Dhaka.
Chaired by NBR member Mohamad Farid Uddin, others who spoke at the programme included commerce minister Tofail Ahmed, economic affairs adviser to Prime Minister Sheikh Hasina Mashiur Rahman, chairman of the parliamentary standing committee on the finance ministry Abdur Razzak, and Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) president Matlub Ahmad.
The revenue board organised the programme to honour top VAT-collecting business firms across the country for the fiscal year 20132014 at the Bangabandhu International Conference Center (BICC) in Dhaka.
Nine business firms at the national level and 110 at the district level, in the production, services and business categories, were honoured at eight separate programmes across the country in recognition of their contributions through highest collections and payments of VAT to the government.
Muhith pointed out that eligible organisations were not properly paying VAT. He said these organisations should be brought under the VAT net to ensure the countrys economic development and the social welfare of its citizens.
VAT is a kind of indirect tax that is paid by consumers while purchasing products and receiving services. Business houses later deposit the VAT collected with the government exchequer. At the programme, FBCCI president Abdul Matlub Ahmad demanded that the rate of VAT for small and medium-sized businesses be reduced from the current 15 per cent. He argued that small and medium entrepreneurs would not be able to pay VAT at 15 per cent.
He also demanded that the recommendations of the review committee on the VAT and Supplementary Act, 2012 be implemented. These include raising VAT-free turnover to Tk. 36 lakh from Tk. 24 lakh and the turnover limit for imposing 3 per cent turnover tax to Tk. 1.50 crore from the existing Tk. 80 lakh. The government recently increased the VAT-free turnover limit to Tk. 30 lakh.
Matlub also suggested to the revenue board to arrange VAT fairs across the country to motivate and create awareness among businesspersons to properly deposit the VAT collected with the government exchequer.
The PMs economic affairs adviser, Dr Mashiur Rahman, urged the revenue board to be careful about the acceptability of tax measures to the taxpayers. If the tax measures are not acceptable to taxpayers, they will try to evade taxes, he said.
Abdur Razzak, chairman of the parliamentary standing committee on the finance ministry, advised the NBR to scrutinise the possibility of fixing the minimum house rent for different posh areas in cities for income tax purposes to prevent tax evasion. He observed that rich people were showing house rent far below the actual house rent to evade income tax.
He also said high-income groups, including doctors, engineers and lawyers, were not paying taxes properly, and should be brought under the tax net.
Tofail Ahmed said the revenue board would have to ensure that harassment to the taxpayers during the process of tax payments is ended. He added that though there are 18 lakh TIN (taxpayers identification number) holders in the country, only 11 lakh TIN-holders submit tax returns.
The commerce minister urged the officials of the NBR to cooperate with taxpayers so that they can file their returns in an easy way in order to widen the tax net. There is a lot of people in rural areas who have the ability to pay taxes. They should be given TINs, and then tax collections will go up, he added.
