Economic Advisor Dr. Salehuddin Ahmed said that for 50 years, many industries have been nurtured with tax exemptions and various incentives. He questioned, “How long will we continue to nurture these industries? We need to move out of protection; otherwise, we will not be able to be competitive.”
He made these comments during a seminar held at the multi-purpose hall of the National Board of Revenue (NBR) in Agargaon, Dhaka, on Tuesday morning, marking VAT Day and VAT Week 2024. The seminar was chaired by NBR Chairman Md. Abdur Rahman and attended by Finance Secretary Dr. Md. Khairuzzaman Mozumder, FBCCI Administrator Md. Hafizur Rahman, former FBCCI Director Abdul Haque, and others. The keynote was presented by Mohammad Belal Hossain Chowdhury, NBR Member (VAT Policy).
Dr. Salehuddin Ahmed also pointed out that after some time, businessmen request tax exemptions. “I won’t give specific examples, but you can understand that these industries are still like children. They may have grown physically, but they still seek protection. Those days of protection are over.”
He emphasized that tax evasion impacts the overall economy, noting that donor organizations often question the tax-to-GDP ratio and tax exemptions. He mentioned that in many foreign countries, questions are raised regarding Bangladesh’s tax revenue and social security.
The advisor called on officials to be more supportive and cooperative, stating, “Enforcement should not be harsh. If there are difficulties, they should be listened to. Compliance should be assisted, especially for those who are affected. The government will consider the issues of those impacted. There are many complaints about the NBR, but it has its limitations and mandates.”
He added, “Whenever businessmen come to me, they complain about the NBR. Even when I was in the Ministry of Commerce, they used to complain. They would say, ‘We need this; the NBR is not doing that.’ The NBR has its limitations and mandates. Not everything can be given away. Nothing is free in the world. In Western countries, parents do not give money to their children once they grow up. Nothing is free.”
NBR Chairman Md. Abdur Rahman Khan noted that increasing tax revenue is the biggest challenge. He mentioned that there is limited scope for raising tariffs due to their direct impact on the public and WTO recommendations. “Our main sources are VAT and income tax.”
He explained that while businesses collect VAT on behalf of the government, there is a significant gap in compliance. Sometimes customers want VAT receipts, but businesses delay issuing them. There are complaints that while customers have paid VAT, businesses have not deposited it into the state treasury. This is an area that needs attention.
In the keynote, Mohammad Belal Hossain Chowdhury stated that after the interim government took office, the revenue administration underwent significant changes. The NBR is moving forward with major reforms free from political pressure.
Since August 5, the VAT Audit, Intelligence, and Investigation Department has completed 94 audits, uncovering VAT evasion worth 159.66 crore taka and collecting 61.16 crore taka. The VAT division has registered 9,823 businesses in the past three months and established an 8-member committee for reforming VAT laws and regulations.
He further mentioned that challenges include a lack of accurate statistics for VAT collection, taxpayer satisfaction, a tax culture, low domestic productivity, and insufficient trained personnel. The VAT department is moving towards automation to address these challenges.
FBCCI Administrator Md. Hafizur Rahman called for building a culture of VAT payment and reducing VAT evasion tendencies through awareness. He suggested considering whether a reduction in VAT rates could expand the tax base.
Dhk/Hasan
