‘Not ready to accept new VAT system yet’

State minister for finance MA Mannan said people of our country are not yet ready to accept the new Value Added Tax (VAT) system and need to be trained about it.

The state minister came up with the comments while attending a roundtable titled ‘Budget-2017-18’ organised by Prothom Alo along with The Institute of Chartered Accountants of Bangladesh (ICAB) on Thursday.

ICAB council member Humayun Kabir and Prothom Alo associate editor Abdul Qayyum jointly moderated the discussion where the speakers also discussed the positive and negative aspects of the proposed budget.

The state minister also said, “Budget implementation will not be a problem even without any training if we all work together.”

Distinguished fellow of the Center for Policy Dialogue (CPD) Mostafizur Rahman at the roundtable said the size of the budget is not the issue but the issue is implementation.

“We are trying to be a middle income country from a lower income one. The budget is not that big from that point of view. The tax purview and size also increases if the budget gets bigger,” he said.

Mostafizur Rahman also said it is not clear where the income will come from. The estimation for the budget implementation is not compatible with the global situation, he added.

He said the export growth was also expected 7 per cent in 2016-17 fiscal. Export growth needs to be 40 percent in June if that growth has to be reached. However, export growth in less than 4 per cent in the last 11 months. The same situation is with remittance, he added.

He also said supplementary duty has been increased in 1200 more items where the duty was supposed to be excluded from the tax. It will create pressure on the consumers. He also said supplementary duty has not been imposed to save the domestic industries but to collect tax.

The economist said it is frustrating that the allocation for the education sector has been cut in such a populous country.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) director Abu Naser said the business community requested different rates in the VAT law, which was not reflected in the budget. He also asked how the huge amount of VAT will be collected when the small businessmen do not know how to implement the new VAT law.   

Bangladesh Association of Software and Information Services (BASIS) president Mostafa Jabbar said the VAT online is being run by a low grade software. He said, the software is very critical and difficult for the common people. It does not use Bangla font.

“We’ve managed VAT registration for everyone where the software is even not right”, he said.

It is not possible to digitise VAT online without digitising the National Board of Revenue (NBR), he added.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) vice president Mohammad Nasir came up with the issue of determining the value of the taka against US dollar.

He said all the neighboring countries had devalued their local currency, but it is overvalued in Bangladesh.

He said the rate of the taka should be determined against the dollar through ‘duel currency rate’ or any other system. He also came up with the requirements of incentive in the readymade garments (RMG) sector.

Campaign for Popular Education (CAMPE) executive director Rasheda K Chowdhury said the education sector should have had separate allocation in the proposed budget. However, allocations had been deducted from the education and cultural sector, she added.     

ICAB council member and also former director of the organisation Parveen Mahmud said the people of the country are in not comfortable with the proposed budget.

ICAB president Adeeb Hossain Khan thanked the government for proposing such big budget and giving importance to the infrastructure development. Pointing out a number of negative points of the budget, ICAB president said there has not been any change in the high tax rate in the business and personal tax. The profit from bonds is also under the inflation rate, he added. He also said that the price hike of the essential products is not a good sign.

Former ICAB president Kamrul Abedin, former Security and Exchange Commissioner president Faruq Ahmed Siddiqi, Dhaka Chambers of Commerce and Industries vice president Kamrul Islam, ICAB council member Shahadat Hossain, AF Nesaruddin, and Farhad Hossain also spoke at the discussion.

Source: Prothom Alo