Govt might not hike SD on telecom services
Financing Minister AHM Mustafa Kamal might scrap his programs to raise the supplementary duty (SD) on telecom solutions and double the deposit found in VAT-related disputes following criticism and pleas from various quarters.
While unveiling the cover fiscal season 2020-21 on June 11, the minister has proposed hiking the SD on a myriad of telecom services to 15 % from the prior 10 per cent.
Both operators and users have expressed dissatisfaction at the maneuver and said tax on cellular phone use increased in the last few years, which includes negatively affected customers' service-availing trends.
On Wednesday, Telecom Minister Mustafa Jabbar, in a demand letter to the finance minister, called for withdrawal of the excess SD, pointing away that it could thwart the procedure of digitalisation.
"People are now having an extremely tough time, therefore the government shouldn't create any longer burden for them," the telecom minister told The Daily Superstar.
Other cabinet members and members of the parliament also requested the finance minister to scrap the SD. Apart from the latest hike in the supplementary duty, there is a 15 % value-added tax and 1 % surcharge on cellular phone bills from before, which make the full total tax for cellular phone use 33.25 per cent now.
Kamal might withdraw the proposal even while making a affirmation to parliament on the proposed spending plan on Monday.
Another area that could see change may be the deposit needed for appealing against tax statements before VAT commissioners and appellate tribunals.
Kamal has proposed to improve it from 10 per cent of the disputed quantity at present to 20 %.
This is one of the VAT-related measures businesses and trade bodies have expressed worry about, saying a number of the proposed changes in the VAT law increase their costs and discourage them from seeking justice against inflated earnings claims by field officials of the National Board of Revenue.
In his funds speech, Kamal said the increase targeted at reducing a tendency of lodging illogical cases against VAT claimed by discipline officials.
The existing practice is that firms file appeals for revision of VAT claims before commissioners by paying 10 % of the disputed amount.
Then they can appeal prior to the VAT Appellate Tribunal of the NBR by simply paying another 10 % of the disputed amount.
If they want to seek revision of appellate tribunal verdicts prior to the High Court, they need to pay another 10 % of the disputed amount.
As per the proposed improvements for next fiscal season, businesses will have to deposit a complete of 40 per cent of the disputed VAT amount - 20 percent to file appeals prior to the commissioner of respective field and 20 % for VAT Appellate Tribunal, said Md Arshed Ali, convener of the study wing of VAT Specialist Forum, recently.
Businesses must deposit an additional 10 % of the disputed tax in order to seek revision against the appellate tribunal's verdicts prior to the High Courtroom, he said.
The finance minister, even so, may just do it with his intend to widen the scope for investing the untaxed money, generally known as black money.
Specific taxpayers will be permitted to disclose any kind of undisclosed property by paying out some tax per square foot, declare undisclosed cash, bank deposits, savings certificates, shares, bonds or any kind of different securities and invest money in the capital market by paying 10 per cent tax on the worthiness of the investment.
Now, black money holders will not face any questions about the resources of their income if they invest in economic zones and hi-tech parks.
The provisions will discourage the genuine taxpayers, the Center for Policy Dialogue said in a paper.
If this kind of provisions is usually to be at all allowed, the amount ought to be the applicable tax fee plus penalty, it said.
Kamal may keep most of his fiscal measures about tax unchanged. He has already proposed a whole lot of concessions in the immediate tax segment to help ease the burden on the average person and corporate taxpayers amid devastating coronavirus pandemic.
The Tk 568,000-crore budget and the Financing Bill 2020 will be passed in parliament on Tuesday.
Source: www.thedailystar.net
