Federation of Bangladesh Chambers of Commerce and Industry has requested National Board of Revenue to carry out a regulatory impact assessment before implementing the suspended new VAT law.
FBCCI, in a recent letter to NBR chairman Md Mosharraf Hossain Bhuiyan, said that NBR should amend the Value-Added Tax and Supplementary Duty Act-2012 after conducting the study and taking the recommendations made by different trade bodies.
After that, NBR should go for implementing the law, it said.
The new VAT law, which will replace the old VAT Act-1991, was supposed to come into force from July, 2017 but parliament deferred the implementation until July, 2019 amid strong oppositions from the country s business community against its various provisions including introduction of uniform 15 per cent VAT rate and abolition of package VAT.
NBR in October, 2017 decided to conduct an impact assessment of the new law.
The revenue board at that time also held meetings with the business community and other stakeholders including research organisations over the issue.
But the decision is yet to be implemented.
In the November 29 letter, FBCCI, the apex trade body of the country, also suggested eight terms of reference for the study team.
The trade body said that the key objective of the study would be identification of the basic differences between the VAT act-1991 and the VAT act-2012.
Comparative analysis of impact on revenue collection from sectors like import, export, production, turnover, trade and services in the two VAT regimes should also be examined, it said.
The proposed study should also find out the impact of both new law and old law on small and medium enterprises, trade and services sectors, and assess incidence of 15 per cent VAT on retail businesses and consumers.
It will also evaluate the capacity of VAT officials and businesses and will recommend what should be done.
The study will identify the new VAT act s articles which should be amended and describe the pathways of implementation of the law with multiple VAT rates.
The study will examine the impact of withdrawal of package VAT and truncated VAT rates for the retail businesses and service sector and the impact of complexity and cost for keeping records for getting rebate and refund by the retail businesses, FBCCI said.
A senior NBR official said that VAT Online Project, dedicated to implement automated VAT system under the law, sought opinion from various research organisations including Policy Research Institute and Bangladesh Institute of Development Studies on the proposed study but did not get any response.
NBR also did not make any further move regarding the opinion seeking, he said.
He also said that a NBR committee was now working on amending the new law.
The committee will address the major recommendations including introducing multiple VAT rates from the business community while finalising the amendment proposals, he said.
So, we think it will not require carrying out the study as the concerns of businesses will be addressed while recasting the law, he said.
The committee will soon place its draft report before the NBR chairman and then NBR will hold consultations with stakeholders including trade bodies on the proposed amendments to the law, he added