Businesses with over Tk50 lakh annual sales likely to face 15% VAT
This change is expected to increase VAT obligations for a significant number of establishments
Highlights:
- VAT rate hike from 4% to 15% for businesses making over Tk50 lakh sales
- Businesses with annual turnover above Tk30 lakh now need BIN
- NRB source says plan is to raise VAT rate further by mid-year
- Hikes come in bid to meet IMF target
The National Board of Revenue (NBR) is expanding the scope of Value Added Tax (VAT) by increasing the rate from 4% to 15% for businesses with annual sales exceeding Tk50 lakh.
Previously, businesses with annual sales up to Tk50 lakh were exempt from VAT and did not require VAT registration or a Business Identification Number (BIN).
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Under the new rules, the ACC officials said businesses with an annual turnover exceeding Tk30 lakh will be required to obtain a BIN.
For businesses with a turnover ranging between Tk50 lakh and Tk3 crore, the VAT rate was previously set at 4%. However, the NBR plans to impose a flat 15% VAT on all businesses with annual sales exceeding Tk50 lakh.
This change is expected to increase VAT obligations for a significant number of establishments.
On average, businesses with daily sales exceeding Tk13,698 will fall under the 15% VAT bracket.
An NBR official, speaking anonymously, told The Business Standard, "The plan is to raise the VAT rate further by mid-year to meet the International Monetary Fund's (IMF) new revenue targets."
The official added that the new VAT structure is likely to be implemented through an ordinance following the president's approval.
