NBR opposes relaxing VAT rules for weak firms

The revenue authority has opposed a proposal from the Bangladesh Investment Development Authority (Bida) on relaxing rules for payment of value-added tax for the financially weak companies.

The National Board of Revenue (NBR) said VAT is an indirect tax and companies collect them from consumers against the sales of goods and services to deposit to the state coffer.

"As such, it is not logical to ease the VAT rate for financially-challenged companies," said the NBR's VAT wing in its opinion.

The view came after the Bida sought to incorporate such a proposal to ease the process of doing business in the country.

The investment promotion agency also asked the revenue administration to relax the provision of VAT returns. It proposed a quarterly VAT return submission period instead of monthly.

The VAT department said companies have to submit VAT returns monthly after depositing the VAT to the state coffer. It will not be wise to introduce a return submission for every three months for the sake of revenue collection, said the revenue collector.

"We, however, agree with the proposal of expediting the refund process of VAT paid in excess by firms. And we are working on that," said an official of the NBR.

The Bida has also called for issuing business identification numbers for VAT to the companies in Dhaka and Chattogram in two days. The NBR said it gives the VAT registration in three working days.

Md Billal Hossain, the executive member for investment environment services of the Bida, said the Bida proposed for bringing changes to some provisions of the VAT rules.

"We hope that the NBR will share its view in the next meeting," he added.