This document contains the presentation materials for a talk on taxation in Bangladesh. It discusses the history and implementation of Value Added Tax (VAT) in Bangladesh. The presentation is made up of several speakers who cover topics like the definition of VAT, the VAT mechanism, VAT rates and exemptions in Bangladesh, trends in VAT collection, and the authority that administers VAT. It provides an overview of how VAT works and its role in the Bangladeshi tax system.

1. WELCOME EVERYONE!
PRESENTATION
OF TAXATION

2. Today’s Speakers
• Sajid Kamal (1488)
• Fahim Hasanul Islam (1503)
• Isteak Ahmed (1478)
• Faisal Bin Didar (1489)
•Robiul islam (1509)
2

3. VALUE
ADDED
TAX
3

4. Fahim Hasanul Islam
1503
4

5. Friedrich von
Siemens, who
proposed it in 1918
as a substitute for
German turnover
tax.
For its regeneration,
In 1954, the value
added tax system
was initiated by the
joint director of the
tax authority of
France, Maurice
Laure.
HISTORY OF VAT
5

6. VAT IN BANGLADESH
In April 1979, the
Taxation Enquiry
Commission (TEC)
officially took up
the issue of
introducing VAT in
Bangladesh as an
alternate to sales
tax.
Final version of the
Value Added Tax Act
was promulgated 31
May 1991 as a
Presidential
Ordinance with
eight sections. It
was made effective
from 2 June 1991.
6

7. What is VAT
Value Added Tax, popularly known as
‘VAT’, is a special type of indirect tax in
which a sum of money is levied at a
particular stage in the sale of a
product or service.
Value Added Tax a tax on which the
value of an article has been increase
stage of its production.
-The Oxford Dictionary
7

8. Characteristics of VAT
Vat is a
general tax
that applies
on goods and
services
both.
It is a
consumption
tax because
it is borne
ultimate by
the final
consumer
It is
transparent
and easier
the actual
tax burden
is visible at
each stage in
the
production
and
distribution
chain.
VAT is
applicable to
all domestic
products and
services with
some
exemptions
Export is
exempt
8

9. Isteak Ahmed
1478
9

10. Types of VAT
Value Added Tax
(turnover minimum 80
laks , percentage is
15%)
Turnover Tax
(Under section 8 & 4
of the VAT Act)
Supplementary Duty
(10-500 percent
under section 7 of the
VAT Act)
10

11. Advantages
Encourages
personal
saving &
investment
Income
generator for
covering
government
expense
Cross credit
Minimizing
the tax
evasion
feature
Revenue
potential
11

12. Disadvantages
Revenues are
lower than
expected
criticized as
the burden
Refund of Tax
Increase
inflation
costly
12

13. Scope
Value Added Tax Act, 1991
Value Added Tax Rules, 1991
Finance Act
SRO (Statutory Regulatory Orders)
Vat Case Law
13

14. Faisal Bin Didar
1489
14

15. First, value added
is equivalent to the
sum of wages to
labor & profits to
owners of
production factors.
Second, value added
is simply measured
as the difference
between the value of
output & the cost of
inputs.
THE VAT MECHANISM
15

16. Three alternatives in VAT computation
The Addition
Method
The Subtraction
Method
Tax credit
method
16

17. Three types of VAT base:
Consumption
Method:
Allows businesses to
immediately deduct
the full value of taxes
paid on capital
purchases.
Net Income Method:
Allows gradual
deduction of Vat paid
on capital purchases
over a number of
years.
Gross National
Product Method:
provides no
allowance for taxes
paid on capital
purchases
17

18. Robiul Islam
1509
18

19. Exemption From VAT:
• According to section 14 of Value Added Tax Act, 1991, the provisions
with regard to the exemption from value added tax are as follows:
• The Government:
The government can exempt importation or supply of any goods or
rendering of any service from VAT or SD by notification in the official
Gazette under this act.
• The Board:
The board can exempt importation or taking delivery of any goods
and receiving of any services from VAT or SD by special order under
this act.
19

20. List of goods Exempted from VAT:
All goods listed in the second schedule of the Narcotics Control
Act, 1990
• Methyl Alcohol
• Rectified Spirit
• Foreign liquor produced in Bangladesh etc.
 Goods listed against some specific Headings in the First
Schedule of the Customs Act, 1969 under HS Code
• Live animal
• Natural Honey
20

21. Services Exempted from VAT:
Basic services essential to life
Social Welfare Services
Culture Oriented Services
Finance and Finance related Services
Transport Services
Personal Services
21

22. Sajid Kamal
1488
22

23. VAT Authority
Administrative Judicial
National Broad of Revenue Appellate Tribunal
Commissioner, VAT
Commissioner,(Large Taxpayer Unit),
DG (Central Intelligence Cell)
DG (Duty Exemption & Drawback
Office), VAT
Additional DG/ Commissioner, VAT
Commissioner
(Appeal), VAT
Joint Commissioner Director, VAT
Deputy Commissioner/Director, VAT
Assistant Commissioner/Director, VAT
Superintendent, VAT
Inspector, VAT
23

24. Some important features of VAT in Bangladesh
A single stage VAT is applicable for both imports cum manufacturing.
A uniform rate of 15% is applicable.
VAT is compulsory for whole sellers/retailers.
Exports are zero rated.
VAT is payable at the time of supply of goods & services.
Turnover tax @3% is livable where turnover amount is less than tk. 80 lac
Luxurious and socially undesirable goods are subject to supplementary duties
VAT is applicable for forty six listed services
Some industries like Agro-based, cottage industries are exempted from VAT

25. VAT Collection Trends in Bangladesh
FY2008-09 FY2009-10 FY2010-11 FY2011-12 FY2012-13
Total
Revenue
69180 79484 95188 114885 139670
Total Tax
Revenue
55526 63956 79052 96285 116824
Value Added
Tax
20116 22795 28274 34304 40466
% of VAT to
Tax revenue
36.23 35.64 35.77 35.63 34.64
 All amount shows in crore
25

26. In Bangladesh, VAT has
been in force now for
nearly 18 years. After a
slow start, the number
of registered taxpayers
has significantly
increased and the VAT
has become a
significant contributor to
government revenue.
26

27. 27