The government moves to rewrite the new VAT act, accommodating in it some provisions of the existing law, to skip wild criticisms and possible price rises.    
Officials said exercises are on stream to accommodate some of the provisions of the existing VAT law of 1991 in the new VAT and Supplementary Duty (SD) Act 2012 following demands from businesses and to stem escalation of prices.
Incorporation of multiple rates of the value-added tax (VAT), continuation of the tariff value, estimated time for accommodating the changes in the VAT online system have been studied by the VAT wing of the revenue board recently as per instructions from government high-ups.
The department of VAT of the National Board of Revenue (NBR) has exercised the options and sent separate summaries to the Ministry of Finance (MoF), sources said.
However, they said, the government has yet to take any decision about deferring the VAT and SD Act 2012 meant for enforcement from the upcoming fiscal year, beginning July 01.
A senior official said an announcement might be made on June 22 regarding the much-debated VAT law-as to whether the government should continue with the existing VAT law 1991 or stick to its position on implementation of the new law from July 01, 2017.
Businesses have demanded multiple rates of VAT instead of 15 per cent uniform rate for all sectors as many sectors will not be able to claim VAT rebate.
"Lowering the uniform rate of VAT cannot make businesses happy. They want different rates of VAT, not a uniform one," said the official.
Currently, there is truncated base of VAT in different sectors for a number of major products and services for the sake of consumers.  
Officials said the move for exercising the options started after the Prime Minister (PM) had pledged to review the pros and cons of the new VAT law and explore possibility of alternatives in a recent meeting.
Sources said the VAT wing feels helpless over the indecisiveness of the government on implementation of the VAT law.
They said such a dilemma on part of the government high-ups after budget proposal left the officials in a quandary.
In such a situation, the VAT wing did an exercise with both the options and assessed impact on revenue collection.
The government has set the highest revenue-collection target from VAT in FY 2017-18, to the tune of Tk 878 billion, as a positive outcome of implementation of the new law.
Postponing enforcement of the new law would affect the revenue-collection target of the government in the upcoming FY, the officials said.
They said delay in taking the decision on VAT law made the officials confounded 10 days ahead of finalization of budget for 2017-18. The budget is expected to get through Parliament on June 29.
There were proposals from the lawmakers and business communities for deferring the VAT law until 2019, that is, until after next general election.
Sources said it could be an issue of the opposition party even if the government defers the new VAT law implementation until after election.
They said there had been no decision made yet either on the new VAT law implementation or backtracking on it.
The NBR already has digitised the business identification number (BIN) as groundwork for executing the new law. Some 40,000 businesses, both existing and new, obtained the electronic BIN.
A senior official of the VAT online project (VOP) said introduction of the multiple rates of VAT would restrict the benefit of claiming rebate.
The online system of BIN and return submission would remain in place even though the government jettisons implementation of the new law, he added.
It has been found that the digitised date-counting clock for new VAT law implementation remained active in different places.
Also, the NBR is continuing its activity centering the new VAT law. The NBR held first divisional meeting on VAT law Monday in the city.
A cabinet meeting was also held Monday without discussing the VAT law, confirmed two ministers, preferring anonymity.
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Source: The Financial Express