Finance Minister AMA Muhith on Thursday said a single and uniform VAT rate will be applicable for three consecutive years from the next fiscal year.
“This rate will be 15 percent which will remain unchanged over the next three years,” he told Parliament while placing the budget for the 2017-18 fiscal year.
To successfully implement the Value Added Tax and Supplementary Duty Act, 2012, Muhith said, the business community had put forward some recommendations for protecting the legitimate interest of the small entrepreneurs.
“On the basis of their recommendations, I’m proposing to raise the annual [VAT-free] turnover from Tk 30 lakh to Tk 36 lakh,” he said.
The firms with this annual turnover will be completely out of the scope of tax. Such benefit was not there in the 1991 VAT Act.
According to the desire of the business community, Muhith said he proposed to raise the threshold for registration under VAT from Tk 80 lakh to 1 crore 50 Lakh.
“In other words, businesses having a total yearly turnover up to Tk 1 crore 50 lakh will be able to avail of the opportunity to pay only 4 percent tax on their turnover,” he said.
The minister said this is a unique opportunity for small entrepreneurs.
He proposed to provide VAT exemptions on 536 primary food items such as rice, lentils, fish, meat, vegetables, sugar, honey, puffed rice, maize, wheat, liquid milk, barley, salt etc as same as before.
Besides, he proposed to provide VAT exemption to 93 items of life saving drugs.
“Public transport services, public health and medical services, education and training services will also enjoy VAT exemption.
I am also proposing VAT exemption for 404 items of agriculture, livestock and fisheries sectors as same as before. Non-commercial activities of charitable and cultural organisations will enjoy VAT exemption facility.”
As a result of these exemptions, the Finance Minister said, the market prices of the daily necessary commodities are expected to go down and not supposed to increase under any circumstances.