IBFB proposes 12pc VAT rate

Dhaka,  Mon,  26 June 2017
Published : 14 Jun 2017, 22:07:20
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IBFB proposes 12pc VAT rate

Calls for withdrawing excise duty on deposits
FE Report


The International Business Forum of Bangladesh (IBFB) Wednesday proposed revising the VAT rate at 12 per cent in the budget instead of 15 per cent while adjusting the deficit with increased rate for banks, insurance and mobile phone companies.

"15 per cent VAT rate creates strain on the business community and citizens. Some South Asian countries have average VAT rate of 13.5 per cent, in lower middle income nations of Asia, the rate is 11.8 per cent, which is considerably lower than Bangladesh.  Bangladesh should make it 12 per cent," said IBFB president Hafizur Rahman Khan.

He was speaking at a press meet at the National Press Club in Dhaka to voice his chamber's reaction to the proposed budget for fiscal year 2017-18.

The chamber said that the budget for 2017-18 is "luxurious" but it is acceptable considering the country's economic growth and business expansion.

The IBFB suggests the government keep the same pace of ADP implementation around the year, for that, the projects should utilise money from rolling budget, instead of the annual budget.

They urged the government to withdraw proposed excise duty on bank deposits.

"Imposing additional excise duty on bank deposits will allow the government to generate extra Tk 2.10 billion only, but it will create huge concern for people from all walks of life. It should be withdrawn," it said.

The IBFB president welcomed the proposal for increasing the special duty on filter and non-filter Bidi, which will discourage the ordinary people to smoke at least to some extent.

Mr. Khan also welcomed the VAT rebate for the domestic industries, but he was dissatisfied with the move to provide no rebate on emerging industries of the country.

He urged the government to encourage the investors to invest in the remote and economically-backward regions of Bangladesh by providing tax rebate, VAT reduction while making sure the availability of power and gas.

Mr. Khan also called for reducing indirect tax and increasing direct tax.

"Indirect tax imposes burden on the poor people," he said.

He said that New Zealand collects 58 per cent tax revenue from direct tax and India collects 51.6 per cent tax revenue from direct tax.

He also suggested increasing the number of taxpayers rather than increasing the tax rate.

Director of IBFB and former chairman of NBR Dr Abdul Majid, vice president of IBFB Humayun Rashid, founding president of IBFB Mahmdul Islam Chowdhury, Director of IBFB and former chairman of Bangladesh Tariff Commission Dr. Mozibur Rahman attended the press conference, among others.

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