Sunday, 30th April , 2017, 03:55 pm,BDST
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People accept 7% VAT : Matlub



Lastnewsbd, 30th April, Dhaka: FBCCI President Abdul Matlub Ahmad said that implementation of the new VAT law will be difficult if the law is not amended. Matlub Ahmad said in the welcome address at the 38th meeting of the National Board of Revenue, jointly organized by the National Board of Revenue and FBCCI on Sunday.

Finance Minister Abul Maal Abdul Muhit was the chief guest at the program. State Minister for Ministry of Finance and Planning M.A. Mannan, senior secretary of the Department of Internal Resources and Chairman of the National Board of Revenue, Md Nazibur Rahman gave their special speech on that program. Officers of various ministries, officials of the National Board of Revenue, former FBCCI president, and business leaders were also present there.

Addressing Finance Minister FBCCI President Matlub Ahmad said that the present government has presented 8 budgets in two terms. You are going to announce the fourth budget of the current period. For this regard sincerely thanks from the private sector and thank you. The Prime Minister’s direction and your visionary and prudent plan and sincere efforts strengthened our economic development. We are grateful to the government for this. The government has already declared that VAT and Supplementary Duty Act-2012 will be implemented on July 1, 2017. In this context, the 38th meeting of the Consultative Committee of the National Board of Revenue today’s of great importance.

“The budget size of the next fiscal year 2017-2018 is expected to be Tk 4 lakh 200 crore. This means that the budget will grow at around 17 percent. The target of revenue growth is also 33 percent. While the national economy stands on a solid foundation, downside trend is seen in some important indicators. In particular, the growth of exports and remittance of two main sources of the national economy is currently down. There is a possibility that the changes in the global economy can have a negative impact on the country’s national economy. Besides, due to the disastrous natural disasters in the last few days, there has been huge loss of Boro Crops across the country”, said FBCCI President.

Abdul Matlub further said in this situation the formation of an ambitious budget and determining the excessive revenue to implement it can adversely affect the economy. We think that the size of the budget is based on the quality of the discussion and the ability to implement it. Keep in mind that people can bear the burden of large budgets. In order to implement the budget, there should be a clear and clear direction and plan for continuous improvement in the quality of efficiency, transparency, accountability and supervision. Otherwise the implementation of the budget will be prudent. Moreover, it is important to strengthen the National Economic Framework to increase capability in implementing the budget by maintaining quality standards, thinks the head of the country’s top business organization.

FBCCI president said, despite the limitations of 6 percent, the growth has achieved over 7 percent this year. Thank you to the government with your heartfelt thanks. With the success of this success, the target for the next fiscal year is to set 7.4 percent GDP growth and 5.5 percent for inflation, which is a strong step. We firmly believe that the combined efforts of all will be achieved. To achieve this goal, we have pledged our comprehensive cooperation for the private sector.

Abdul Matlub Ahmad also gave some suggestions on considering the overall economy of the country for the next fiscal year 2017-2018.

Those suggestions should be like:

We believe that the issues related to improving unemployment by increasing power, energy, infrastructure, investment, employment generation, balanced distribution of resources, proper application of foreign aid, and extra income from domestic sources are challenging in the formulation of budget and proper implementation of the next budget. Special attention should be given to encourage private sector. Foreign funding can be emphasized on the relatively cheap interest in budget funding. In this, the government’s dependence on the banking system will be reduced, the burden of huge interest will be less and the transparency in the implementation of the project will be increased.

Annual Development Program: Proposal for adopting appropriate steps in the implementation process of the overall project including the size of the ADP, the formation of a timely plan, the appointment of qualified and skilled project directors.

Investment: In order to achieve the target of 8% growth by 2020 according to desired targets, investment of both the government and non-government sectors will be greatly increased to ensure 34.4% of the GDP.

Electricity and Energy: Electricity and fuel are unlimited for the country’s strong economic development. To meet the country’s electricity demand, the government has taken several positive initiatives to increase the power generation, which is the benefit of us. However, it is important to ensure uninterrupted power supply for industrialization.

Export development, Diversification and Export Promotion: Enhancing the Export Process and Export Policy for Exporting, Expansion and Multipurpose Export of Countries, Enhancing Affordable Export Promotion, USA, CIS, and European countries to adopt effective bilateral free trade relationship have to do take these initiatives.

Development of small, medium and cottage industries: It is important to strengthen the services of small and medium enterprises in the interest of employment and investment, to provide loans and services in a simple and easy manner and strengthen the small, medium and cottage industry duty and tax system.

 Good governance and justice: We must ensure good governance and justice for social stability. It will not be necessary to make the necessary investment otherwise, to ensure consistency, transparency and accountability in all levels of government.

Women Entrepreneur Development: Specially requested for special allocation for the upcoming budget for women entrepreneur development sector. Besides, I propose to set up industrial parks for women entrepreneurs and separate women entrepreneur banks.

Agricultural production: In order to reduce the financial loss of farmers affected by recent natural disasters, it is necessary to ensure agricultural loan facility on easy terms. It also needs to strengthen the monitoring of agricultural sector subsidies so that the farmers reach at the right time.

 Industrial efficiency and capacity building and regional development: In order to encourage specialization and encouragement to encourage investment and industrialization in the remote and backward areas of the country including northern areas, as well as to reduce the inadequacies of industrial plots, BSCIC and other state-owned enterprises are requested to provide directions for the use of unused land.

Tourism industry development: The country’s most promising sector is the tourism industry. Special attention is needed to develop the tourism industry.

Price of the product: In order to keep the prices of essential commodities in front of the Rose, it is advisable to keep the balance of the market price, ensuring the continuous availability of supply. This need to strengthen the government for monitoring system to control prices.

FBBCI President said, “Now I am presenting important issues related to income tax, import duty and value added tax for the business organizations on behalf of the business organizations for your kind consideration.” In the meantime, the policy-based and sector-specific detailed budget proposals have been given to everyone. Also, if there are other proposals, it will be raised in free discussion. There is a need to focus more on increasing the tax rate by not increasing the tax rate in the budget. There will be no pressure on those who pay taxes regularly. The top businessman believes that it is necessary to emphasize the direct tax reimbursement without being overly dependent on indirect taxes.

Details about import duty, income tax and VAT have been given to you which will be discussed in today’s Consultative Committee meeting. However, he would like to mention some of the important proposals below.

Import related tariffs proposal:

Tariff level

To maintain the domestic industry, increase the current tariff 1%, 5%, 10%, 15% and 25% to maintain the increased production, investment and employment and consumer interest. Presently, tariff schedules have zero percent duty on 312 products; continue in the next fiscal year. Such as yarn life-saving medicine, vitamins, cereals, carbohydrates etc.

Specific Duty

Continuation of the 47 products that have been set up in the form of dustbins, such as steel and iron products, sugar, cement clinker, petroleum products etc.

 Strong committee structure

Due to under invoicing and Miss Declaration government is deprived of revenue so as discrimination in trade and business is also created. For this reason, in order to prevent under-invoicing and miss declaration, a proposal to formulate a strong committee comprising of the FBCCI, Tariff Commission, Customs Commissioners, and a strong committee, convener of the National Board of Revenue (NBR), to form a database of merchandise value.

Tax law

In the light of the World Trade Organization’s Customs Valuation Agreement and Trade Facilitation Agreement, the new tariff legislation is in the final stage to create a modern and realistic business-friendly environment and make revenue-friendly. In the coming budget session, we propose to pass the tariff law.

Supplementary duty

Under the new VAT Act, supplementary tariff will be raised from 1350 products and services in 1520 products and services. This will control foreign goods in the domestic market and it will be challenging to survive in the local industry competition. For this reason, presently, supplementary duty has been imposed on those products and services, or other regulations, including imposing regulatory duties.

Income tax related proposals:

Increasing the tax-free income limit of individuals

Income tax or direct tax confirms social justice. Most of the taxes in the developed and developing countries are collected from direct taxes. The ratio of direct and indirect taxes in Bangladesh is less than many South Asian countries. Direct tax contributions in Malaysia are 75 percent, Pakistan 37 percent, India 56 percent and Bangladesh 30 percent. The number of e-TIN lenders crossed 28 million this year with the efforts of the National Board of Revenue and the successful teamwork. I propose to increase revenue from income tax sector by bringing them under the Income Tax return. This will increase tax-GDP ratio. Considering the cost of living and inflation of the people, we propose to increase the income tax-free income limit from Tk 250,000 to Tk 3, 25,000.

Corporate tax rate

For all companies, the corporate tax rate is 25% and 35%. To bring transparency in tax payers and reduce the corporate tax rate we propose 2.5 percent to increase government revenue. Also, we propose to keep tax rates listed by the VAT registration company by 2.5 percent less than the tax rate trading company.

 Surcharges

With the objective of establishing savings, capital formation and establishment of justice, we propose to increase the limit of zero percent of surcharges by presenting the net assets of the individual taxpayers the extent of 2 crore 25 million to 5 crore taka.

Advance income tax

The National Board of Revenue, as it is digitized, does not need to take an AIT at the import level. So, for the sake of indigenous industries, we propose to withdraw 5 percent advance income tax or AIT on the basic raw material of the industry. This will reduce the cost of production and increase the competitiveness of the products produced in the industry.

Taxation of source tax for export

With the encouragement of export and competitive competence, we propose to reduce the tax rate from 0.7% to 0.5 percent by all the export sources, including garments. Besides, requesting the Honorable Minister of Health for consideration for export and export of dollar incentives for remittance.

Gross Profit (GP)

In the case of gross profit (GP), the officials are unable to come out of traditional thinking and the taxpayers are accepting various harassment. In order to eliminate the differences between the taxpayers and tax officials, please request the Honorable Minister for giving proper guidance or guidance for determining logical and standard gross rates.

Proposals related to Value Added Tax

The Value Added Tax and Supplementary Duty Act-2012, the recommendations of the 7 (7th) Standing Committee for making re-examination recommendations and the joint working committee’s working commitments are not being implemented due to the crisis of confidence. In this situation, the implementation of the new VAT law has introduced the online VAT system, which we have applauded. We are not against the new VAT law, but we believe that if the new VAT law is not amended according to the needs of the traders it will be difficult to implement. Implementation of FBCCI’s recommendations and recommendations of various trade organizations, Implementation of VAT Act and Rules, is essential for the country’s small and medium industries, business and services sector so that the economic activities of the country are not hampered and the government is able to recover the desired revenue. In the light of recommendations of the Joint Committee, the following proposals are again submitted.

Exemption limit

In all cases (production, business, service delivery), instead of Tk 30 lakhs, it has been recommended to exempt up to 36 lakhs turnover. Considering the limitations of the ability of small business or shopkeepers to maintain the account of small and small enterprises, cottage industry etc. and considering the extent of the ability to store accounts, immediately after that, we propose to set aside the limit of 36 lakhs.

 Turnover limit

In the supply of production, business and service, the annual turnover has been proposed to impose 3% turnover tax at the production level of only 36 lakh taka to 1.50 crore taka. This recommendation has been given to encourage small and medium industries in terms of money and inflation, and to introduce simple method and tolerant taxation.

In the case of businessmen or shopkeepers

At the business level, it is recommended to impose VAT at a rate of 2 percent irrespective of turnover amount up to Tk 36 lakh annually. However, in this case, the traders recommend that the payment of the advance tax or the input tax paid on imported goods be made to impose the condition.

VAT deduction at reduced rate

In relation to the taxable supply of the institution unable to accept input tax credit, it is recommended to include the provisions of VAT on the reduced rate reduced by the government. In the interest of small and medium service sectors, instead of 15 percent it is very important to define the rate of VAT.

 Goods transport services

Proposals to include trucks, mini trucks and pickup term with the terms of the transport services provided by taxi, bus, minibus or ferry, as mentioned in serial no.3, in the first part of the first schedule of the first schedule of the supply or import exempted under Section 26 of the Act.

On the request of the National Board of Revenue, we propose a number of amendments to the VAT and Supplementary Tariff Act-2012 and Rules-2016. In the light of this recommendation, I am requesting for the amendment of the law. The language of the VAT and Supplementary Duty Act-2012 is quite complex. To make business-friendly with all taxpayers, I propose to simplify the size of the law and simplify the language. To further strengthen the ongoing partnership system between the FBCCI and the National Board of Revenue, FBCCI’s cooperation will continue in implementing the VAT Act in the future to create a business-friendly environment and revenue-friendly environment with the support of sector-based 384 associations, including 64 District Chambers of FBCCI.

Matlub Ahmad said that the suggestions that will be received through today’s negotiations will play a significant role in making the next budget. Our expectations will be in the budget of a well-meaning, real and timely plan to create the opportunity to set up the private sector in the country to address the challenges of the globalization situation. We firmly believe that there will be specific guidelines and long-term plans in the budget to build a happy and prosperous Bangladesh.

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