New VAT won't push up commodity price: Muhith

Imposition of 15 percent flat VAT would not push up prices of goods as the government has expanded the area of tax not exactly its rate, finance minister AMA Muhith said at a post-budget press conference here yesterday.

"The annual turnover of businesses has been increased from Taka 30 lakh to Taka 36 lakh and a good number of firms with this annual turnover will be completely out of the scope of tax," the finance minister told journalists while explaining the new Value Added Tax (VAT) system.

"Threshold for registration under VAT has been increased from Taka 80 lakh to Taka 1.50 crore. In other words, businesses having a total yearly turnover up to Taka 1.50 crore will be able to avail of the opportunity to pay only 4 percent tax on their turnover," he said.

"This is a unique opportunity for the small entrepreneurs, which is not available in other countries of the world. In addition, several changes have been incorporated in the new act and rules to simplify the VAT collection procedures according to the proposals of the business community," he added.

Industries minister Amir Hossain Amu, Agricultural Minister Matia Chowdhury, Planning Minister AHM Mustafa Kamal and State Minister for Finance and Planning MA Mannan were present at the press conference at Osmani Memorial Auditorium in the city.

"Small and medium businesses will pay VAT and a total of 1043 products are exempt from VAT," said planning minister AHM Mustafa Kamal.

About lowering the interest rate on savings certificates, the finance minister said the interest rates on savings tools will be reviewed in the next one or two months.

"We're thinking to review the interest rates of savings certificates one in a year from now on," he added.

About excise duty on bank accounts, Muhith said the duty will not be withdrawn as the people who keep Taka 1 lakh or above in bank are well-off enough in society.

According to the proposed budget, accounts having balance between Taka 1 lakh and Taka 10 lakh will be slapped with Taka 800 excise tax at any time of a year.

Responding to a question, Muhith said the price of rice has gone up recently due to the impact of the natural calamity instead of the impact of the proposed national budget.

"We will import rice to control the market," he added. "Rice price will come down soon as the government has opened tender to import rice from Vietnam on government to government basis," said Agricultural Minister Matia Chowdhury.

Responding to another query on implementation of the proposed budget for FY18, Muhith said, "It is the best budget of my life. Raising questions about the implementation capacity of the administration is irrelevant and the administration which implemented over Taka 91 000 crore budget in 2009 has been implementing Taka 3, 17,174 crore budget for FY17".

About the gas price, the finance minister said it will be costlier, if the dependence on importing gas goes up.

Responding to a question Muhith said, "Awami League's vision and ideals have been reflected in the proposed budget but the main aim of it is to ensure welfare for all and we have tried to do it."

Source: bss