VAT law should be clear and predictable: MCCI
The Metropolitan Chamber of Commerce and Industry yesterday called for a clear, stable and predictable VAT policy such that entrepreneurs can form their long-term business plans.
“There are concerns from the business community,” MCCI President Nihad Kabir said at a workshop on implementation roadmap of the new VAT law.
The new law, called VAT and Supplementary Duty Act 2012, will become effective from July 1 and replace the existing VAT Act 1991.
The National Board of Revenue will implement the new law through automation of the VAT system and VAT administration -- expected to boost revenue collection, reduce the hassle of businesses and improve transparency and accountability.
“There is no doubt that the new law will improve the NBR's performance,” she said, while calling for uniform interpretation and application of the law for all taxpayers.
But the business community are concerned about the abolition of a wide area of tax exemption; withdrawal of the package VAT, truncated-base and tariff value systems; and imposition of uniform rate of VAT at 15 percent.
“Any challenge that arises in achieving this can and should be addressed through close cooperation between the tax administrators and taxpayers,” Kabir said, adding that the MCCI is keen to help the NBR in this regard.
The MCCI, whose members mostly fall under the large taxpayers' category, said it has always encouraged the expansion of VAT coverage and reduction of the rate.
The new law has a broader coverage. Besides imports, production, trading and services, the VAT law will also cover import of services, immovable property, lease grants, licences, permits and rights facilities, she said.
“This is good news for the business community that pays VAT regularly,” she said, adding that the online VAT system will reduce interaction between taxpayers and tax officials. The MCCI president appreciated the deletion of the provision of price declaration in the new law for businesses.
She also urged the government to take initiatives to build awareness among the business community on Alternative Dispute Resolution to help mitigate the backlog of cases in court. At the programme, Md Nojibur Rahman, chairman of NBR, said the tax authority has taken steps against non-compliant businesses.
Policy Research Institute Executive Director Ahsan H Mansur said some provisions of the VAT law will be helpful for businesses.
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