Dhaka, Bangladesh (BBN)– The government on Monday approved in principle the draft of a new value-added tax (VAT) law aiming to collect more tax, officials said.
The cabinet in a meeting with Prime Minister Sheikh Hasina in the chair approved the draft. Once the draft gets through parliament, it will impose a single VAT rate of 15 percent at all levels.
After the cabinet meeting, Cabinet Secretary M Musharraf Hossain Bhuiyan briefed journalists on the draft law and said the new law incorporated global good practices and took suggestions from the stakeholders.
Mr. Bhuiyan also said the other objectives of the proposed law are to remove inconsistencies in the existing law, reduce exemption of VAT and make the existing law time-befitting.
The draft law will be placed before parliament in the upcoming budget session for 2012-13. It will replace the existing law framed in 1991.
The law will come into effect from July 2015 to help businesses take preparations to accept the new measures.
The officials said some rules regarding registration and submission of returns would come into force from the upcoming fiscal.
They said International Monetary Fund (IMF) tagged the condition to approve a new VAT law by this fiscal to disburse US$ 1.0 billion in loan under Extended Credit Facility (ECF) fund.
BBN/SSR/AD-13Mar12-11:00 am (BST)