The government is stepping back from a much-discussed proposal to impose VAT at a fixed rate — ‘package VAT’ — on small businesses. However, the requirement for a Business Identification Number (BIN) to open a current account at a bank or financial institution, renew a trade licence, or open a bKash or Nagad merchant account will remain, according to finance ministry and National Board of Revenue (NBR) sources.
At present, retail businesses with an annual turnover of Tk 50 lakh or more must obtain VAT registration, and those below that are outside the VAT net. But the new budget proposal had said all retail businesses, regardless of turnover, would be brought under VAT from 1 July.
The proposal had spread anxiety among small traders, who feared it would raise operating costs and increase the risk of harassment by VAT officials.
According to government sources, Finance Minister Amir Khasru Mahmud Chowdhury directed that the relevant provision be dropped before the Finance Bill is passed into law as the Finance Act.
A senior official said the proposal could create complications in implementation, and that many medium-sized businesses might try to take the package-VAT benefit instead of the general VAT system. The decision had been reconsidered for these reasons, the official said.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report