No income tax, VAT on remittance | 2018-06-14 |

No income tax, VAT on remittance

Staff correspondent     14 June, 2018 12:00 AM printer

The National Board of Revenue (NBR) has dismissed as false the social media report that the government has imposed Value Added Tax (VAT) and income tax on remittance.

The government has not imposed any VAT and income tax on money sent home by expatriate workers in the proposed national budget, the NRB said through an official statement on Wednesday.

Social media reports that VAT and income tax have been imposed on remittance is totally false and rumour, the statement signed by senior information officer of NBR Sayed A Mumen said.

The NBR thinks that a Hundi syndicate can spread such false news in an evil attempt to block country’s remittance flow and tempt expatriates to send foreign currency through Hundi.

VAT is mainly imposed on supply of goods or services. Foreign remittance comes from Bangladesh expatriates who provide services through hard labour outside the country.

The entire process of sending foreign remittance is considered as export of services under sub-section 2 (A) of Section 3 of the Value Added Tax Act 1991.

So export activities are excluded from VAT. This means that no VAT is applicable to this sector regardless of remittance limit. An expatriate can send any amount of foreign currency or remittance through valid banking channels, said the NBR statement.

Sending foreign currency through illegal channels or Hundi can not play a role in the national economy.

The NBR authorities have requested all to refrain from sending remittance through Hundi. The NBR  always remains alert to Hundi or money laundering.