Keep package VAT unchanged

Shop owners yesterday urged the government not to raise the package VAT amount on their total sales from next fiscal year as it would pile pressure on them.

The package or fixed VAT is an indirect tax that groceries and shops deposit to the National Board of Revenue based on their annual turnover.

At present, small traders within the Dhaka and Chittagong city corporation areas pay Tk 11,000 as package VAT, but the amount has been increased to Tk 14,000 in the proposed budget for fiscal 2015-16.

The shop owners in other city corporations pay package VAT of Tk 8,000; their amount has been raised 25 percent to Tk 12,000.

For district municipalities and the rest of the country, a 20 percent increase has been proposed from the existing amounts of Tk 6,000 and Tk 3,000 respectively.

“This is not acceptable,” Md Shah Alam Khandaker, secretary general of Bangladesh Dokan Malik Samity, an association of shop owners, said at a press briefing at Dhaka Reporters Unity.

The government also proposed to lower the VAT-free ceiling for commercial space in the upcoming budget, a move that will also hit the small shop owners.

At present, commercial space of up to 300 square feet is VAT-free, but from next fiscal year it will be 150 square feet.

“The government did not discuss the issue with the stakeholders. So, we are requesting it to continue the existing facility,” Khandaker added.

There are about 25 lakh shops across the country, which collectively log in Tk 3,000 crore in daily sales on average and employ 75 lakh people, according to SA Quader Keron, chairman of the association.

The shop owners make 10 percent, or Tk 300 crore, in gross profits from the daily transactions, he said.