The new VAT law with multiple rates will go into effect from next fiscal year, says Finance Minister AHM Mustafa Kamal.
“There will be no single VAT rate … rather three different rates, like 5%, 7.5% and 10% to be effective from next fiscal year (Jul 1),” he told the media on Thursday after a pre-budget meeting at the National Economic Council.
Responding to a query, Kamal said the 15% VAT is not likely to exist from next year.
The finance minister held the pre-budget meeting with the chairmen and members of Parliamentary Standing Committees on different ministries including the finance and planning and on public accounts and public undertakings, reports BSS
Kamal said initially, 50,000 machines would be set up to collect VAT from some 50,000 business enterprises and gradually the number of such machines would be gradually ncreased to half million.
He said the government would consider lowering the corporate tax rate keeping in mind the revenue collection scenario. “We’ll have to generate more revenue to meet our growing demand and the income tax, duty, and VAT are the main sources of revenue.”
Discussions concerning the new VAT law have been underway since 2009. The government wanted to implement the 2012 ‘Value Added Tax and Supplementary Duty Act’ from 2016 but scrapped the plan following intense protests by businesses.