News

PM asks Muhith to postpone enforcing new VAT law

20 Jun,2017


Dhaka, BdChronicle:

Prime Minister Sheikh Hasina asked FinanceMinister AMA Muhith to postpone implementing the controversial new value-added tax law set to be effective from July 1, Finance Ministry officials said.

The directive came at a meeting in parliament office on Monday, also attended by National Board of Revenue Chairman Nojibur Rahman and Finance Division officials.

An official who was present at the meeting said the prime minister did not want the new law, which introduces 15% flat VAT rate, to create any extra pressure on people as the government headed for national election in just one and half years.

She asked the officials concerned to further review the implementation plan of the VAT and Supplementary Duty Act 2012.

Sheikh Hasina also wanted to know about the outcome of the negotiations that continued for the last four years with the country’s business community on the new VAT law.

“Find out if there was any negligence from the officials that led to the failure in negotiations with the business community and left the problem still unresolved,” she was quoted as saying by an official.

The government came up with the postponement plan of the new VAT law because of the possible negative impacts on people’s life and the ruling party’s standing ahead of the next parliament polls.

Besides, the government also considered strong oppositions from the country’s business community to the execution of the new law.

Meanwhile, the prime minister already directed the NBR to make a plan how to increase VAT collection by Tk17,000 crore as per the budget target in the upcoming fiscal year without the help of the new law.

Before Sheikh Hasina went on an official tour to Sweden, she had asked the finance minister to settle the VAT rate crisis.

Besides, the cabinet meeting on June 11 reached a consensus on the imperative of postponing the implementation of the VAT law from July 1. But the meeting, chaired by the prime minister, did not set any new date for enforcement of the law.

The VAT Act 2012 is going to introduce a uniform 15% VAT rate which many believe will raise the cost of living.
 

More News