Dhaka: Finance Minister AMA Muhith on Wednesday reiterated the government plan to introduce a single rate of value added tax (VAT) from July 2016 replacing the existing multiple rates.

‘Though businessmen prefer multiple rates of VAT, but the global practice is a single rate and it has many more advantages. That's why we plan to introduce a single rate of VAT,’ he told a taxpayers motivation meeting at Diploma Engineers Institute auditorium in the city.

Organised by the National Board of Revenue (NBR), the meeting was chaired by NBR chairman Mujibur Rahman. FBCCI president Kazi Akram Uddin and some officials of NBR also spoke at the meeting.

The Finance Minister, however, said that despite the government's decision, discussion will continue with the business community to breach the gap with them in this regard.

He informed that in response to the businessmen’s demand, the government is thinking of setting the minimum annual turnover level of a business over Tk 30 lakh from the present level of Tk 24 lakh to apply VAT.

Defending the government's stance on introducing a single rate of VAT, Muhith said: ‘If the rate is single, then it has lot of advantages. We can maintain the inventory easily as to how much money is coming from which source. The global practice is also the same.’

Different donor agencies, particularly, the IMF has been pressing the government to keep the uniform 15% VAT rate while businessmen are demanding multiple rates.

A new VAT law was passed in parliament in November 2012 to introduce a single rate of such tax, but the law could not come into effect because of opposition from the businesses.

The Finance Minister said that if the collection of taxes is not increased then the country's budget would not increase. Mentioning the government's credit to increase the national budget to Tk 2.5 lakh crore, he said that when the Awami League government announced its first budget, it was Tk 90,000 crore.

Muhith expressed the hope that the frame of the budget will be more than double by 2019-20. Kazi Akram Uddin said the NBR would have to take initiative to

encourage the micro and small entrepreneurs to pay tax like they encourage large taxpayers.