Finance Minister AHM Mustafa Kamal in his budget speech on Thursday proposed to implement the Value Added Tax and Supplementary Duty Act, 2012 from July 1, 2019.
“We are going to implement our long-awaited Value Added Tax Act, 2012 from the coming fiscal year (2019-20). To ensure effective implementation of this Act, we will provide all types of logistical support including necessary manpower,” he said while placing the national budget for 2019-20 fiscal in the Jatiya Sangsad today (Thursday).
Proposing for implementing the VAT system in six tiers, he said a Joint Working Group will be constituted comprising representatives from the government and the private sector, which will oversee the implementation of the law.
Along with the standard VAT rate of 15 per cent, there will be reduced rates of 5.0 per cent, 7.5 per cent and 10 per cent for specific goods and services, Kamal added.
Considering the possibility of inflation, he said, specific taxes have been fixed for some specific products and services.
The VAT rate has been fixed at 5 percent for the local traders and as a special measure, considering the sensitivity of the product, the rate of VAT at the trading stage of pharmaceutical and petroleum products shall be 2.4 per cent and 2.0 per cent respectively.
The minister said the new Value Added Tax and Supplementary Duty Act, 2012 has been formulated in line with the international best practices. It will make a significant improvement in the “ease of doing business” index, he added.
In the new act, he said, taxpayers would have the opportunity to get online service for VAT and Turnover Tax registration, tax payment, return submission and refund.
The existing price declaration system before the supply of goods will be abolished and the taxpayers will pay VAT on the basis of fair market price, he added.
The finance minister said currently there is a provision to maintain sufficient balance in the Account Current Register while supplying the goods.
However, according to the new law, there is no such provision and the businessmen will be able to pay tax at the end of the month through the VAT returns, he said.
Kamal said wherever 15 per cent VAT is applicable, the input tax credit can be obtained through the VAT return and return will be treated as the application of refund.