Many industries acting like infants despite enjoying tax exemption for 50 years: Finance adviser

Finance Adviser Salehuddin Ahmed has slammed certain industries for remaining underdeveloped despite benefiting from long-term tax exemptions.

"For 50 years, we have been nurturing many industries by giving tax exemptions. They are still infants.  How long will we support them? I am not mentioning their names bu t you can understand," he said while addressing a seminar, organised on the occasion of National VAT Day, at the NBR office in the capital's Agargaon on Tuesday (10 December).

"They have grown physically, but they still cannot consider themselves adults [self-sufficient and capable of paying taxes]. The days of benefits are over and we need to come out [of the culture] now," said the adviser, expressing his dissatisfaction over the tax exemption.

Salehuddin Ahmed also told officials of the National Board of Revenue (NBR) to pay heed to businessmen facing various forms of harassment by the revenue authority.

"Whenever businessmen come to meet me, they always complain about the NBR. So listen to them and make rational decisions," he said.

"Their [businessmen] words also have a mandate. Not everything they demand can be provided but there must be rational decisions, and there must be a sense of kinship," said the finance adviser, emphasising the need for compliance by businessmen as well. 

Addressing the seminar, NBR Chairman Abdur Rahman Khan emphasised the importance of closing the tax compliance gap. 

He pointed out that the number of VAT registrations in the country is far below what it should be, with only four to five lakh registrations instead of the expected 25 lakh. "We are working on ways to increase this," he said.

The NBR chairman also said, "Businesses are collecting VAT as the collecting agent of the government. However, to be honest, we see a huge gap in this regard." 

Presenting the keynote at the seminar, NBR member Mohammad Belal Hossain Chowdhury highlighted several challenges in implementing VAT, including multiple rates, turnover tax and the specific rate, which distort VAT compliance. 

He also pointed out challenges such as VAT deduction at source, reduced VAT rates, the complex definition of services, input-output coefficients and reluctance to pay VAT invoices.

Finance Secretary Dr Md Khairuzzaman Mozumder, Administrator of the FBCCI Md Hafizur Rahman and President of Bangladesh Reconditioned Vehicle Importers and Dealers Association (BARVIDA) Abdul Huque spoke at the event, among others.

National VAT Day was celebrated nationwide on Tuesday. The NBR will observe VAT week nationwide from 10 to 15 December.