Implementation of the new VAT law would not only help the government to earn more from sales receipts but also from income taxes, said top officials of the National Board of Revenue yesterday.
Under the existing system, many businesses can evade VAT because of the lack of records, which ultimately deprives the government of income tax.
Representatives from the NBR, consumer rights groups, retailers and importers attended the discussion moderated by Mahfuz Anam, editor and publisher of The Daily Star.
Hossain went to elaborate the much-touted facility of VAT rebate in the new law.
For instance, a producer sells a good worth Tk 100 to a wholesaler at Tk 115, which includes the 15 percent VAT. The wholesaler then sells the good on to a retailer at Tk 125 and a 15 percent VAT, which is equivalent to Tk 18.75, would have to be paid on that price too.
But the wholesaler would have to pay VAT of only Tk 3.75 as he had already paid Tk 15 as VAT to the producer. Similarly, retailers will also get the facility.
In this case, the VAT burden will reduce for sellers, while increasing revenue from income tax as real sales figure would be reflected in the accounts.
The NBR's revenue last fiscal year stood at Tk 156,000 crore, with VAT contributing 37 percent, income tax was 36 percent and import duty 27 percent to the sum.