Intimidating businesses to pay VAT not helpful: FBCCI

Intimidation and harassment of businessmen by field-level NBR officials for collecting value-added tax (VAT) is not good for stable businesses, Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), has said.

Seizing businessmen's documents, sending them letters of demand, issuing show-cause notices and creating a panicky situation during raids will eventually harm businesses, he said at a seminar and VAT payer's award ceremony at Hotel Intercontinental in the capital on Saturday.

The National Board of Revenue (NBR) organised the event, marking the 12th National VAT Day 2022 and VAT Week.

"Panic cannot be created for VAT collection. We are not in favour of those who deliberately evade taxes. We want the country's tax revenue to increase. But ensuring a people-friendly, investment-friendly and productive sustainable tax revenue infrastructure is essential to maintain the momentum of national economic development," Jashim Uddin said.

"It is important to identify new VAT areas and bring new people under the VAT net but those who pay VAT regularly should not be harassed. This will eliminate the disparity in trade," the FBCCI leader said.

"The NBR should work on solving the source tax adjustment issue that businesses are facing now. Besides, the new Income Tax Act needs to be implemented as soon as possible as we move forward to become a developed country," he said.

NBR Chairman Abu Hena Md Rahmatul Muneem presided over the event attended by Finance Minister AHM Mustafa Kamal as the chief guest.

The International Monetary Fund (IMF) praised Bangladesh's extraordinary progress when a delegation of the organisation visited Dhaka recently, said Finance Minister AHM Mustafa Kamal.

"We started with a gross domestic product (GDP) size of $100 billion 14 years ago. Now the economy has quadrupled to $465 billion. Similarly, per capita income increased from $686 to $2,864," the finance minister said, adding that the country came to this position because of the contribution taxpayers made.

He said, "Our goal is to move from a middle-income country to an upper middle-income country by 2030 and a developed one in 2041. To achieve this goal, taxes must be paid."

The minister also sought suggestions from businessmen regarding the digitisation of the VAT collection system.

While addressing the seminar, NBR Chairman Abu Hena Md Rahmatul Munim said, "The challenges of developing countries are ahead of us and we see these challenges as possibilities."

"We are providing the kind of support that business organisations need to compete with the global economy. We are extending support so that our companies can make value-added products. We want to create export diversification opportunities for them," he said.

"We have already reduced taxes. The more we can expand the tax net, the more we can reduce the tax rate. We have undertaken automation activities in revenue collection," the NBR chairman added.

Presenting the keynote article at the seminar, NBR member Zakia Sultana said Tk3,01,633 crore of revenue was collected in the fiscal year 2021-2022. 

Of the amount, about 65% to 67% of revenue was derived from indirect taxes (VAT and customs) with the VAT sector contributing the rest, the NBR official added.

At the event, NBR also informed that electronic fiscal devices (EFDs) are being installed in business establishments to increase VAT collection at the retail level. Some three lakh new devices will be installed in the next five years.

9 organisations awarded for highest VAT

The finance minister handed over certificates and awards to the nine organisations that paid the highest VAT in the production, business and service sectors in the fiscal 2020-21.

The highest VAT payers from the production sector are Olympic Industries Limited, Ibn Sina Pharmaceutical Industry Ltd and SMC Enterprise Limited.

In the business category, Walton Plaza, Agora Ltd (formerly Rahimafrooz Superstores Ltd), and Unimart Ltd have become the top VAT payers.

bKash Limited, International Finance Investment and Commerce Bank Limited, and Nagad Ltd (formerly Third Wave Technologies Ltd) get the award in the service category.