Shop owners calls for 2% VAT in upcoming budget

Leaders of Bangladesh Dokan Malik Samity (BDMS) on Saturday urged the government to impose 2 per cent VAT at the source instead of 5 per cent at both the wholesale and retail levels in the upcoming national budget for the 2022-23 fiscal year (FY) to protect micro and small businesses.

BDMS leaders made the call at a press conference at the BDMS head office in Moghbazar, Dhaka.

“The government’s VAT collection will likely increase three times if 2 per cent VAT at the source is implemented instead of 5 per cent. Many businesses will come under the VAT net, increasing the government revenue,” said the association’s President Mohammad Helal Uddin.

Helal Uddin also implored the authorities concerned to amend the Mobile Court Ordinance to ensure that businesses are no longer subjected to harassment.

“We urge the government to withdraw all cases and exempt fines imposed on micro and small business organisations for not submitting previous VAT returns,” Helal said.

The BDMS president also entreated the authorities to set up a Micro and Small Foundation by dissolving the existing SME Foundation to protect very small businesses in the country.

Also speaking at the event, Golam Rasul, general secretary of Bangladesh Tiles Dealers and Importers Association, told The Business Post that the National Board of Revenue (NBR) was currently performing poorly in the overall VAT collection process.

“As such, the government should lower VAT at the source to bring more enterprises under the VAT net,” he said.

Meanwhile, Moulvibazar Traders’ Association General Secretary Asgor Hossain Babu claimed that VAT collectors harassed businesses with annual turnover below Tk 20 lakh despite VAT not being applicable for businesses having annual turnover below Tk50 lakh, as per law.