Industrialists and brick kiln owners will now have to pay value-added taxes on fees for environmental clearance certificates issued by the Department of Environment. Since environmental clearance certificates create prospects of economic activities, a 15 percent VAT at source will be applicable to their issuance and renewals, the revenue authority said in a letter to its field offices last week. However, there will be no VAT on the compensation realised by the Department of Environment from polluters. But VAT will be applicable to fees for testing samples of water, liquid waste and air, according to the letter. Currently, the department charges fees on industrial units and brick kilns according to the amount of investment riding on the ventures. For industrial units and projects, the department charges fees in 12 slabs of invested amount, beginning with Tk 1 lakh and ending with more than Tk 1,000 crore. For example, an entrepreneur whose investment is between Tk 1 lakh and Tk 5 lakh will have to pay Tk 1,500 for fresh environmental clearance certificates. For projects with investments of upwards of Tk 1,000 crore, the fee is Tk 5 lakh. For renewal of environmental clearance, one-fourth of the fee is applicable. The department charges fees on brick kilns based on four slabs of invested money. Fee of some Tk 15,000 is applicable to investment between Tk 1 lakh and Tk 50 lakh. For investment of more than Tk 5 crore, a brick kiln owner has to pay Tk 40,000 as fee for fresh permits from the Department of Environment. Renewal of clearance certificates is subject to half the fee of freshly issued permits. “We are yet to calculate how much VAT will come from this area. But it is likely to be quite a handsome amount,” said a senior official at a VAT commissionerate in Dhaka. The official said VAT will be applicable to both freshly-issued environmental clearance certificates and the already-issued ones. However, Faruque Hassan, senior vice-president of Bangladesh Garment Manufacturers and Exporters Asso-ciation, said it would not be logical for the National Board of Revenue to collect VAT on fees of environmental clearance certificates. “Our cost of doing business is rising for various factors. The VAT will put additional burden on us,” said Hassan, also the managing director of Giant Apparels Ltd. Earlier this fiscal year, some NBR field offices sought VAT from the Department of Environment on the clearance certificates it had issued. Subsequently, the department in September 2015 wrote to the NBR for clarification on the issue. Between 2009 and 2014, the department issued 33,240 fresh environmental clearance certificates and renewed 39,968 ones.
