Negotiations to fix VAT rate important said CPD

Negotiations to fix VAT rate important said CPD
May 25 14:41 2016 Print This Article

Centre for Policy Dialogue on Wednesday said fixing the VAT rate without proper negotiation with businesses will not help boost revenue collection.

“Without consultation with stakeholders in fixing the VAT rate, the administration will face problems, as we have seen dispute publicly between the government and business people,” said Debapriya Bhattacharya, CPD distinguished fellow.

He was speaking at a press briefing on Macroeconomic Performance for FY2015-16 (third reading) at the CIRDAP auditorium in Dhaka.

The National Board of Revenue has proposed to fix the uniform VAT rate at 15% under the new VAT law passed in 2012 in the parliament to increase revenue collection. The new law will come into effect from July 1, 2016. For a long time, stakeholders demanded reducing the VAT rate to 7% from the proposed 15%.

CPD Executive Director Professor Mustafizur Rahman said: “VAT is a progressive system. However, the VAT rate should be fixed in a way that the public does not feel pain.”

About the black money, CPD said the culture of black money whitening facility, without any condition and punishment given in every budget, should be stopped, as it has a negative impact on the faith of other policies of the administration. “We should come out of this culture and solve the problem,” said Debapriya.

He called for regulations to review money leaving the country. “Money has been transferred to other countries, as the recent Panama Papers revelation shed light on offshore accounts.”

For sustainable growth, CPD put forward some recommendations, including the gearing up of employment generation, reduction of diesel and kerosene prices for the benefit of the poor, increase of public expenditures on social safety net and proper ADP implementation and institutional reformation.

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