But it is still unclear how much of a new budget deficit will be created because of non-implementation of the VAT law in FY2017-18 as there are conflicting figures from the Finance Division and NBR. Finance Division and NBR have canceled Eid holidays to resolve the complexities in the wake of the decision not to implement the new VAT law right now. The VAT rate of 15% will be withdrawn from the health sector and energy and electricity bills, according to Finance Division sources. While the next fiscal year’s budget deficit has been estimated at Tk1,12,276 crore in the proposed budget, Finance Division officials said the deficit could cross Tk1,80,000 crore if the new VAT rate is not enforced. According to Finance Division officials, the decision may force the government to borrow more from saving instruments and banking sectors to meet the enlarged budget deficit.

Source: Dhaka Tribune June 24, 2017 19:30 UTC