Preparation to implement new VAT law inadequate: SANEM

Dhaka,  Wed,  26 July 2017
Published : 17 Jun 2017, 09:42:27 | Updated : 17 Jun 2017, 14:56:01
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Preparation to implement new VAT law inadequate: SANEM

FE Online Report
Despite the importance of implementing the new Value Added Tax law, the preparation for it seems inadequate. 

Making the observation, South Asian Network on Economic Modelling (SANEM), also mentioned that in absence of a clear direction on the improvement in the tax infrastructure and ensuring efficiency in tax administration, investors and businesses may not be very confident in the effectiveness of the VAT reform.

And this may again cast shadows on the future private sector investment prospects. 

The government is contemplating to introduce 15 per cent universal VAT rate across the country from July 1 this year.

SANEM also observed that to counter this, the VAT-free turnover ceiling has been raised and a good number of sectors have been exempted from the VAT.

“This seems to be rather ad hoc, and such decisions need to be re-evaluated in the coming day,” said Dr Selim Raihan, executive director of SANEM, at a press briefing on Friday. 

“On top of all this, there is a need for a significant improvement in the tax infrastructure,” he added.

The press briefing was organised to present SANEM’s views on the proposed national budget under its Quarterly Review of Bangladesh Economy or QRBE initiative. 

Dr Selim Raihan, also a professor of economics in Dhaka University, said that the targets of revenue collection and public expenditure are very ambitious. 

There is a very ambitious target of revenue collection in the proposed budget of FY2017-18, around 32 per cent against trend growth rate of 15 per cent. 

“Also, there is a very ambitious target of public expenditure in the proposed budget which is around 26 per cent against trend growth rate of around 15 per cent,” he added. 
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