Shop owners stage protest against new VAT law
Shop owners across the country kept their enterprises shut for an hour yesterday to press home their demand for inclusion of package or fixed VAT for small businesses in the latest law.
Traders formed human chains to put across their demands, which also include revision of the VAT and supplementary duty law by incorporating the recommendations of the government-formed panel.
The panel, which has representatives from the business community and the government, called for multiple VAT rates instead of a universal 15 percent.
The move would help the micro and small businesses flourish and protect consumers as well.
The government formed the committee in 2014 in the face of opposition from the business community about the latest VAT law, which was framed at the prescription of the International Monetary Fund.
The new law seeks to end the scope for package VAT, VAT determined on a truncated basis and the tariff value system that various sectors currently enjoy.
The government planned to implement the new law from July this year, but it may be delayed in the face of opposition from businesses and inadequate preparation by the revenue authority, said insiders.
Traders said it would be difficult to maintain records and accounts to deposit the actual amount of VAT collected from customers.
Customers will have to pay more for various goods and services, said Abu Motaleb, general secretary of Baboshaee Oikya Forum, a platform of small and medium traders.
“We are ready to pay a higher amount of package VAT instead,” he told The Daily Star after the demonstration.
The package VAT helps the retailers run their operations without any harassment, he added.
Currently, retailers have to pay a fixed amount of VAT based on their annual value addition per year. The amount ranges from Tk 3,600 to Tk 14,000, depending on the location of the enterprises.
In the outgoing fiscal year, traders have to pay Tk 14,000 and Tk 10,000 for Dhaka and other city corporations respectively. Retailers in municipalities have to pay Tk 7,200 as package VAT.