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Business strike today to protest VAT collection at import level

Staff Correspondent
All shopsand othersmall businesses in cities andiownsvwill'iobsetve'a -strike todayto press tiregovernment to stop collecting Value-added tax (VAT) at import level and introduction of package system in VAT pay-mentbyretailers.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) however urged thc Babosayee Shangathan Oikya Parishad (BSOP), a newly- formed national platform of shops and small .businesses which has called the strike, to withdraw the programme considering Monday's government decision to strip VAT inspectors of arrest power.
The president of the country's apex trade body, Abdul Awal Mintoo, told The Daily Star last night as the National Board of Revenue (NBR) at a meeting with the FBCCI taskforce on Monday made some decisions to help the traders, the shop owners should not stick to the strike.
"The FBCCI would further negotiate with the NBR to resolve the issues. In running our businesses, we have already been facing hartals and other disruptions from the political parties too often. It therefore is unfortunate if businesspeople themselves enforce strike at a time when most of their demands are already met and we are stillin negotiation," Mintoo said.
The BSOP at a press conference Monday called a daylong strike for today in Dhaka and a half-day one in Chittagong, Rajshahi and Khulna cities and the district towns.
Acting on Prime Minister Khaleda Zia's instructions, the NBR on Monday withdrew the arrest power vested with Vat inspectors, while retaining that of assistant commissioners.
Following protest from businesses, the NBR at the meeting with the FBCCI Monday also exempted importers with outstanding VAT from paying the arrears at one go.
The NBR also decided to allow the importers to clear their goods seized at ports upon payment of 30 percent of the arrears. The rest 70 percent of the arrears could be paid in installments by March 31 next year.
The NBR said the country's importers owe Tk 400 crore in VAT to the national exchequer. It also extended the deadline for self-assessed VAT return by retail-level taxpayers to
August 31 this year from July 31, considering the current flood crisis.
Talking to The Daily Star last night BSOP Convenor M Helal Uddin said the NBR negotiations with the FBCCI taskforce had failed to meet their core demands to stop collection of 1.5-percent VAT at import level and introduction of package system for VAT payment at retail level.
"So, we have decided to go ahead with the strike programme. We appreciate the prime minister's instructions to curtail the arrest power of VAT inspectors and hope she will also fulfil the rest of our reasonable demands," he said.
However, President of Bangladesh Dokan Malik Samity (shop owners' association of Bangladesh) Amir Hossain Khan said, "Our association has nothing to do with the strike. It is entirely a programme of the BSOP, which involves importers, indentors, assemblers, retailers, wholesalers and others."
The minimum annual VAT for shops in the capital is Tk 4,200 and an additional 15 percent for higher income. The FBCCI gave a list of only 7,500 shops of the city, while the shop owners' organisation estimate there are 200,000 shops.
The government introduced VAT in 1991 for different businesses, which in 1997 was extended to retail level.