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Bangladeshi Budget Proposes Hike in VAT, ATV Rates
Source: thefinancialexpress-bd.com
Source Date: Sunday, June 13, 2010
Focus: Internet Governance
Country: Bangladesh
Created: Jun 21, 2010

The government has proposed to increase the Value Added Tax (VAT) on both retail and wholesale level sales to 3.0 per cent from the existing 1.5 per cent in its new budget. The budget for the fiscal year of 2010-2011 has also proposed an increase in advanced trade VAT (ATV) on all imported items to 3.0 per cent from 2.25 per cent. The proposed rise in ATV would help the National Board of Revenue (NBR) to earn an additional revenue of Tk 3.0 billion.

The amount of package VAT will also be increased significantly, which was not revised since 2004. All types of shops in Dhaka and Chittagong city corporations might have to pay minimum VAT Tk 6,000 instead of Tk 4200 while those in other city corporations Tk 4800, in pouroshavas Tk 3600 and in upazilas (sub-district) and rural areas Tk 1800 instead of Tk 3600, Tk 2400 and Tk 1200 respectively. VAT on air-conditioned hotels and restaurants is likely to be increased to 15 per cent from 9.0 per cent, while VAT for non-AC restaurants reduced to 6.0 per cent.

The finance minister has also proposed to impose supplementary duty (SD) on mineral bottled water at 5.0 per cent, soft drink 15 per cent, juice 10 per cent, paints 5.0 per cent, aluminum fabrications 5.0 per cent, jorda-gul (chewing tobacco) 20 per cent. Truncated based VAT also raised on tailoring services, dockyard, auditing and accounting firms to 15 per cent in the budget unveiled last Thursday. Ceiling for turnover tax for small and medium enterprises (SME's) has been raised to Tk 6.0 million from Tk 4.0 million.

Handmade biscuits also brought under tax net with imposition of 15 per cent VAT in the new fiscal year. The government also proposed to allow Bidi factories to sell 20 sticks in packet with filter. The exiting rate of 25 stick bidi is Tk 1.20.
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