Attributing 'little progress' in collection from retail stores to high rate of Vat, the shop owners urged the government to re-fix the Vat to the benefit of both parties.

The owners in a letter to the National Board of Revenue (NBR) through the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) on Sunday recommended reduction of Vat on retail shops in Rajshahi, Khulna, Sylhet and Barisal city corporations from Tk 4,200 to Tk 3,000.

Apart from this, they also demanded re-fixation of Vat on retail shops in district and upazila headquarters to Tk 2,000 and Tk 1,000 from Tk 3,000 and Tk 2,000.

Meanwhile, Amir Hossain Khan, president of Bangladesh Dokan Malik Samity, the apex association of shop owners, said there are some two lakh shops in Bangladesh which may come under Vat net.

Many of them are doing business without any trade licence and evading payment of Vat, he said.

"On the other hand, many shop owners cannot pay Vat as the structure is very high for them," Hossain said.

However, he said, "We are encouraging the shop owners to pay Vat."

In the FY 2002-03 budget, the finance minister fixed the Vat at Tk 4,200 for retail shops located in city corporations and Tk 3,000 outside city corporation areas.

Following a set of recommendations from the business associations, in the FY 2003-04 the Vat was re-fixed at Tk 4,200 in city corporation areas, Tk 3,000 in district towns and Tk 2,000 in upazila areas.

The FBCCI in its letter, signed by its President Abdul Awal Mintoo, said the trade and businesses all over the country are not of the same status. The income and cost of living in Sylhet, Barisal, Rajshahi and Khulna do not match with those in Dhaka and Chittagong, the letter argued.

If the NBR re-fixes the Vat on retail shops in line with the above recommendation, collection will increase, the apex trade body said.

Last year, the NBR and FBCCI in a meeting decided to collect the Vat on public-private partnership basis. During the period, NBR officials said it was impossible to collect Vat going door to door. So, it should be realised through co-operatives and associations, they told businesspeople.