The two proposed laws are ‘Value Added Tax and Supplementary Duty (Amendment) Bill 2020’ and ‘Income-Tax (Amendment) Ordinance 2020’.
The approval came from a cabinet meeting held at Ganobhaban with prime minister Sheikh Hasina in the chair.
According to the two proposed ordinances, penalty and interest can be exempted in the case of failure to submit the VAT return and pay income tax within the stipulated time during a crisis like coronavirus, said cabinet secretary Khandker Anwarul Islam at a press briefing.
Besides, the National Board of Revenue (NBR) also can extend the timeframe for submission of the VAT return and payment of taxes. In this case, the tax officials can also be exonerated from the liability of making loss of revenue by not taking legal actions against tax defaulters, he said.
The cabinet secretary said the monthly VAT return needs to be filed within the 15 days of the next month. It needs to count penalty (Tk 10,000) and interest in case of failure as per the existing law.
But most business outlets have remained closed due to the COVID-19 pandemic and it is not possible for them to file the VAT return in time.
Besides, business organisations including FBCCI requested for extension of timeframe for submission of the VAT return, he said.
In this context, the proposal was made to incorporate a new provision in the article 64 of the existing Value Added Tax and Supplementary Duty (Amendment) Act, 2012.
According to the proposed provision, the NBR can extend time for submission of VAT return with a provision of not paying penalty and interest during any natural disaster, pandemic and emergency situation.
Talking about Income-Tax (Amendment) Ordinance 2020, the cabinet secretary said the proposed ordinance was placed aiming to exempt taxpayers from penalty and interest as well as exonerate the tax officials from liability of making the loss of revenue as all the official activities of the income-tax department have remained suspended since 26 March last and the taxpayers failed to pay taxes in time due to the coronavirus pandemic.
So, the proposal was made to incorporate a new provision in the article 184 of the existing Income-Tax Ordinance 1984 with a view to exempting the penalty, interest and liability during the evolving crisis caused by coronavirus, other epidemic and pandemic, war, and any other act of God like situation, he said.
The cabinet meeting was held after a month with the participation of a small group of cabinet members due to coronavirus pandemic.