Finance minister urges revenue officials to build closer ties with people

Finance Minister AHM Mustafa Kamal has urged revenue officials to build a closer relationship with businesses to motivate them to pay the VAT.

"Those who do not pay taxes should be brought under the tax net instead of putting pressure for more taxes on those who are already paying taxes. The tax net should be expanded," said the finance minister at a seminar on the occasion of National VAT Day and VAT Week 2021 at the IDEB building in Kakrail on Friday.

At the event, NBR awarded nine companies as the best VAT payers. The winners were the highest VAT-paying organisations in the FY20.

"We have to make laws that people can understand and come to pay taxes willingly. Many people want to pay taxes, but they are afraid. They are told that once they start paying taxes, they will not be able to stop it. That is not right," said the minister.

He said Tk44,000 crore revenue was collected during the BNP regime in the fiscal 2005-06. Increasing from that, over Tk3.28 lakh crore was collected in FY21, which is a great achievement of the present government.

"I think we still have to go further. It is still being said that our tax-to-GDP ratio is lower than other countries. Now is the time we increased this ratio," said the minister.

Addressing the award receivers, Mustafa Kamal said, "It is your responsibility to motivate others to pay VAT as well. We need revenue if we want to build more bridges like the Padma Bridge. You will provide us with the revenue.

"Our job is to create a supportive environment for you to achieve this goal. The government does not do business, the government creates an environment for doing business. We are doing that."

Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Md Jashim Uddin said it is important to encourage VAT payers instead of harassing them. Giving notices for closing shops over VAT dues through field officials and threatening businesses are not conducive to a stable business.

"Raw materials that we import to make products are expensive worldwide. The cost of importing these products has almost doubled. Tax exemption facilities will have to be provided to keep the prices of daily necessities stable in the country's market. Otherwise, the common people will be harmed," said Jashim Uddin.

National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem, who presided over the programme, said, "We are expanding our tax net to increase the tax-GDP ratio. We are also reducing the tax rate. In the past two years, we have reduced many of the rates.

"But, the tax rate cannot be reduced much at once as we have to keep pace with the revenue target."

He said the NBR has introduced an automation system to make tax payment easier.

In his keynote address, NBR Member (VAT Policy) Masud Sadiq, said, "In FY21, the country's tax-GDP ratio was 9.6%. In the 8th Five Year Plan, the tax-GDP ratio has been projected to be 11.56% at the end FY25. About 68% of the NBR's total revenue was derived from indirect taxes (VAT and customs)."

The nine best VAT-payers

The best VAT-payer award was given in three categories – production, business and service.

In the manufacturing sector, Aristopharma Ltd, Square Toiletries Limited, Maya Biri Factory won the awards.

SM Motors, AMCO Bajaj International and MABS Union Motors Ltd won the awards in the trading sector.

In the services sector, Edotco Bangladesh Company Ltd, Grey Advertising Bangladesh Ltd and Robert Bosch Bangladesh Ltd were awarded as the best VAT payers.

Ahmed Jubayer, director of finance at Edotco Bangladesh, said, "I consider this recognition a reward for following transparent business policies and paying VAT as per rules. Such recognition of the business community in the national economy will motivate all to pay VAT."

Md Moniruzzaman, managing director of MABS Union Motors Ltd, told The Business Standard, "The system of paying VAT online has been very helpful. Earlier, we had to face various types of harassment."

The NBR has been honouring the best VAT payers regularly for the past few years.

National VAT Day is celebrated on 10 December every year. This time the slogan of the VAT Day is – "Participate in building the country, pay VAT online."