Finance Minister AMA Muhith yesterday placed a bill in parliament seeking to enact a new value-added tax law for expansion of the tax base and scope for collection of more tax.
The proposed legislation empowers the government to set up a VAT authority consisting more than one VAT directorate and other VAT officials.
All VAT officials will perform their functions under the control and supervision of high-level authorities, according tot the bill, which also proposed to repeal the existing VAT Act of 1991.
Some provisions of the proposed legislation will take immediate effect while the government will decide the effect of other provisions by gazette notification.
When the cabinet approved the proposals for the new law in March this year, it was reported that the government moved to bring massive changes to the VAT law in line with an IMF condition to get $1 billion credit from the donor.
In defence of the proposed legislation, Muhith also said the bill was aimed at expanding scope of value-added tax, supplementary tax and turnover tax.
In a brief statement tagged with the copies of the bill, he said the proposed legislation will simplify the tax collection procedure and consolidate rules and regulations related to tax collection.
The finance minister said there were some distortions in the existing VAT Act introduced in 1991 which stood on the way to implement standard VAT system.
According to international standards, the VAT rate should be 15 percent, as the existing tariff values, fixed rates and the truncated base system have led to numerous VAT rates.
The proposed law stipulates that VAT will be imposed at any point where new value will be added from import or production level to retail level.
The bill proposed for a maximum of one year imprisonment or fine or both for any sort of forgery to evade tax for institutions while a six months of imprisonment or fine or both for individuals.
It proposed holding the trial of VAT-related cases in judicial magistrate courts instead of the existing special judges' courts.
It also proposed to introduce alternative dispute resolution (ADR) system to settle any dispute outside of the court and the ADR will get priority over other provisions regarding to resolving tax related disputes.
Meanwhile, Food and Disaster Management Minister Abdur Razzak yesterday placed a bill seeking to enact a law to face all types of disaster in a coordinated way.
The proposed legislation has a provision to set up national disaster management council headed by the prime minister. The other ministers and secretariats concerned will be the members of the high-powered council.
It will also empower the government to set up a disaster management directorate and a disaster management research and training institute to enhance the country's efficiency in tackling disasters.
According to a provision of the bill, the president may declare an affected area as a distressed area. Such announcement will remain effective for maximum of two months.
Both the two bills were sent to the parliamentary standing committees on the ministries concerned for scrutiny.