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Reduced flat VAT rate for all, says Muhith
Reiterating that the proposed rate of value added tax (VAT) will be reduced, Finance Minister AMA Muhith on Sunday said a flat rate will be introduced for all.
He made the remarks while talking to reporters after his pre-budget meetings with two trade bodies -- Dhaka Chamber of Commerce and Industry (DCCI) and Bangladesh Insurance Association (BIA) -- at the Finance Ministry conference room.
Muhith’s assurance came amid demands from different trade and chamber bodies to reduce the VAT rate.
At present, there is a variable VAT rate for different sectors with the highest range being 15 percent.
The Finance Minister said he will sit with Prime Minister Sheikh Hasina later this week to fix the VAT rate. “I’ve already made a public statement on reducing the VAT rate.”
He also made it clear that the new VAT law will be implemented from the first day of the upcoming fiscal year beginning on July 1.
Asked if he received any instruction from the Prime Minister on the issue, Muhith said, “Nothing special. But I’ve conveyed to the Prime Minister that there’s a strong opposition from the business circle about the implementation of VAT law.”
Noting that Parliament passed the new VAT law in 2012, he said it is being implemented in phases and it is yet to be implemented fully.
Responding to a query about Islami Bank Bangladesh Limited, the minister said he also heard that there is a conflict among bank directors.
He, however, categorically said the government will not interfere in the bank’s affairs until Islamic Development Bank, which is a shareholder of the bank, raises any complaint.
About his participation in the IDB meeting in Jeddah, Muhith said the bank has promoted providing fund for local NGO Ahsania Mission to help build a cancer hospital in Bangladesh.
During the meeting with Insurance Association’s leaders, the Finance Minister assured them of cancelling the current system of paying licence renewal fee for insurance business and not allowing NGOs to run insurance business.