The revenue authority is preparing a list of traders who pay trade VAT and package VAT, in a bid to prevent misuse of a tax benefit given to small and medium businesses, said officials.
The National Board of Revenue has already asked field offices, including those in Dhaka, to send the list of traders who pay package and trade VAT.
The NBR is taking the step as it considers reducing the rate of package VAT to lessen the pressure on small and medium shops.
“We want to ensure that large traders do not enjoy that privilege,” said the NBR official, asking not to be named.
The plan was made following a demand from businesses after the package VAT was doubled to Tk 28,000 a year for shops in Dhaka and Chittagong city corporations from this fiscal year.
For shops in other city corporations, the package VAT rate was doubled to Tk 20,000. The NBR also raised the fixed amount of VAT for shops in municipalities.
Traders said the new amount is too high for small shops.
Insiders said the rate of package VAT, which is determined based on certain amount of value addition by shops, may be fixed 20 percent higher from the rate in the previous fiscal year, for example Tk 14,000 in Dhaka.
Revenue officials said the government gets less than Tk 20 crore a year from the package or fixed VAT collected from thousands of small and medium businesses, including stores and restaurants.
Many large shops and wholesalers also prefer to be in the fixed amount of VAT payment system despite logging in quite a handsome amount of turnover, they added.
Currently, shops with an annual turnover up to Tk 80 lakh are supposed to pay tax equivalent to 4 percent of their sales turnover.
But many large shops tend to pay package VAT instead, due to which they do not need to show their annual turnover to the authority, according to revenue collectors.
The government plans to scrap the package VAT system entirely in the new law, which would be in force from July 1 this year.
Under the new law, shops with an annual turnover of up to Tk 30 lakh would be exempt from VAT payment. Shops will have to pay 3 percent tax if their turnover stays between Tk 30 lakh and Tk 80 lakh a year.