Bangladesh vat first introduce by M saifur Rahman on 1991 July 01
Definition of 'Value-Added Tax - VAT'
A type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. Value-added tax (VAT) is most often used in Eurepion union. The amount of value-added tax that the user pays is the cost of the product, less any of the costs of materials used in the product that have already been taxed.
For example when a television is built by a company in Europe the manufacturer is charged a value-added tax on all of the supplies they purchase for producing the television. Once the television reaches the shelf, the consumer who purchases it ...view middle of the document...
Value Added Tax in Bangladesh was introduced in 1991 replacing Sales Tax and most of Excise Duties. The Value Added Tax Act, 1991 was enacted that year and VAT started its passage from 10 July 1991. The 10 July is observed as National VAT Day in Bangladesh.
Within the passage of 22 years, VAT has become the largest source of Government Revenue. About 56% of total tax revenue is VAT revenue in Bangladesh.
Standard VAT rate is 15%. Export is Zero rated. Besides these rates, there are several reduced rates locally called Truncated Rate for service sector are available. Different rates for different services are applied. Truncated Rates are 1.5%, 2%, 2.25%, 3%, 4%, 4.5%, 5%, 6% and 9%.
Bangladesh VAT is characterized by many distortions. Value declaration for product and service, branch registration, tariff value, truncated rates, many restriction on credit system, advance payment of VAT, excessive exemption etc. For many distortion, VAT-GDP ratio is about 4% here. To increase productivity of VAT, Government has enacted new act namely Value Added Tax and Supplementary Duty Act, 2012. This law will be in operation from 2015 with an automated administration.
National Board of Revenue [http://www.nbr.gov.bd 1] is the apex organization administering Value Added Tax.
Vat Act 1991 Bangladesh
VALUE ADDED TAX ACT, 1991 (22 No. ACT OF 1991) [Date of assent of the Acting President and publication in the official Gazette, the 10th July, 1991/25th Ashar, 1398 (BS)] An Act to make provision for imposition of value added tax on goods and service WHEREAS it is expedient to make provision for imposition of value...