Small and medium enterprises (SMEs) in the country have sought tax concessions for a limited time to cope with Covid-19 fallouts as these business entities have been struggling to survive amid the deadly virus pandemic due to inadequate access to financial assistance from the government.
Trade body leaders and experts said small and medium enterprises (SMEs) despite having limited capital play a very important role in keeping the wheels of the economy rolling. Though these enterprises were hit hard by the Covid-19 pandemic, they received little financial assistance from the government for their survival.
Like other countries in the world, the Covid-19 pandemic hit Bangladesh since March last year and country's business entities, big and small, experienced financial crisis as a direct and indirect adverse effect of this rogue virus that forced people to stay home for safety.
Country's big or large companies could overcome the financial crisis to a large extent with the help of the government's stimulus packages. But most of the small and medium enterprises are still counting losses and also failing to pay taxes regularly.
Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) former President and Chairman of Nitol-Niloy Group Abdul Matlub Ahmad said that all enterprises, including large and small, have incurred losses due to corona pandemic over the last several months.
Large business entities especially those are in garment and leather sectors have been able to tackle this crisis, he said, adding that as a result, even in this critical environment, many of these large entities have been paying tax regularly and other duties as per the rules and regulations.
"But small traders are struggling to cope up with the losses due to limited access to financial assistance," he added.
For the survivable of these small business entities, it is urgently necessary to give them tax-duty concessions for a limited period of time immediately, said Matlub Ahmed.
Former advisor of the caretaker government A B Mirza Azizul Islam said that the government should give special attention to small and medium enterprises because these business entities were hit hard during the Covid-19 pandemic.
"The government needs revenue but if one does not have the opportunity or scope to do business, how can one pay the revenue," he added.
He also suggested downward adjustment of tax-duty collected from these organizations amid the ongoing corona pandemic because these businesses keep the wheels of the economy rolling and employ a major part of the workforce.
Dhaka Chamber of Commerce and Industry (DCCI) President Rizwan Rahman said access to finance is one of the largest challenges for SMEs and proposed to establish a SME Bond or specialised SME Bank to safeguard SMEs in the country prior to separate cottage, micro and small industries from medium and large industry sector.
Razzakul Islam, owner of Sohana Department Store in Mirpur-10, said he has not been able to do business for the last one year due to corona. Then how he will be able to pay Value Added Tax (VAT), he added.
Bangladesh Shop Owners Association President Helal Uddin claimed that small and medium business entities are facing pressure from NBR officials to pay VAT.
Mentioning that the current law does not allow collection of VAT on sales up to Tk 50 lakh a year, he said NBR officials are appearing in shops and demanding payment of revenue."We told them (NBR officials) that we were not able to sell more than Tk 50 lakh last year but the officials are not accepting it," he added.
"If this situation continues, we will come down on the streets to protest in the future to protect our business and livelihood," Helal Uddin said, adding that the government should give tax exemption so that traders can survive.
Vice President of Exporters Association of Bangladesh (EAB) Mohammad Hatem said traders who have suffered losses and are unable to pay VAT should be given concession because it is not fair to ask them to pay tax to meet the 'revenue collection target' as such type of steps could increase their mental pressu
In November 2020, the NBR collected Tk 5087.13 crore as local VAT, a shortfall of Tk 481.43 crore or 8.65 percent compared to the same month of the previous fiscal when the collection was Tk 5568.56 crore
NBR member Abdul Mannan Sikder said that if the revenue is not collected, the government will face shortage of fund to finance its development projects.
NBR on behalf of the government is trying to recover the actual VAT from the VAT-givers, he said, adding, "It is not our intention to harass anyone."
Director General of VAT Audit Intelligence and Investigation Directorate Moinul Khan said, "We are working to meet the VAT collection target. Many are capable enough of paying VAT but they are not paying it. We are trying to find these particular traders."