Demand for Stopping VAT Extension as It is Regressive to Poor


index_photo_53Dhaka, 3rd May 2014. Today fifteen right-based civil society organizations led by EquityBD in a rally and human chain in front of the National Press Club accused government for favoring the multinational companies (MNC) with tax rules and demanded for stopping further extension of value added tax (VAT) as planned for the upcoming budget as it is regressive to poor.

Mostafa Kamal Akanda of EquityBD moderated the speeches given at the rally while the other speakers were Dr Mejbah Uddin of Jatiya Sromik Jote, Badrul Alam of Bangladesh Krishok Federation, Subol Das of Bangladesh Bhumihin Somity, Syed Amiul Haque and Rezaul Karim Chowdhury of EquityBD. Fifteen participating organizations are alphabetically Arpon, Bangladesh Bhumihin Shomity, Bangladesh Krishok Federation, Coastal Development Partnership, Kishani Shova, Nature Campaign Bangladesh, NCCB, Online Knowledge Society, Prantajon, SDO, Songsoptok, Udayan Bangladesh, Unnayan Dhara Trust, and United People’s Trust.

The main banner of the rally reads out “70% of the national revenue is collected as indirect tax like VAT, and this is regressively charged from poor while the rest 30% comes from rich and companies as direct tax”. In different festoons and placards the group also said that, VAT extension is forced by IMF, Shame!; Average VAT rate in Bangladesh is 15% which is the highest in the world; Quasem Dry Cell is the highest VAT paying company in Bangladesh; what about big companies like Grameen Phone, British American Tobacco, and Unilever? Do they dodges due tax?; 22,000 personal bank accounts in the country have more than taka 10 million each, but do they fairly pay taxes?; MNCs must publish their country based income and expenditure reports, we want to know how much they earn from us and how much they pay taxes in our country; and No VAT on essential goods, like Rice, Pulse, Cooking Oil.

Syed Aminul Haque of EquityBD said in his speech, if the government is taking strategy for poverty alleviation, it cannot support VAT expansion. Because, in fact, it is proved globally that VAT is regressive to poor. Dr Mejbah Uddin of Jatiya Sromik Jote said that sometimes government shows that they do oppose World Bank and IMF. But in fact, that is hypocrisy. Government accepted the unquestioned conditions from IMF to extend VAT in the next budget. IMF deliberately did this to favor the MNCs with expand more in the countries like Bangladesh. He added, it is also came out in media that MNCs are dodging taxes to take opportunities of lax tax rules.

Rezaul Karim Chowdhury of EquityBD said that the government is enhancing its revenue expenditure without any justification, e.g. the size of our ministry and cabinet is quite bigger than other least development countries. Government must consider justice in fiscal policies. He added that the government must revise the Right to Information Act so that the common people may have access to the accounts of MNCs and local companies if they want.

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