DHAKA, April 12, 2018 (BSS) - The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) today proposed slashing corporate tax by 2.50 percent and increasing the individual tax-free income limit to Taka 3.50 lakh from the existing Taka 2.50 lakh.
In the budget proposals for fiscal year (2018-19), the apex trade body also proposed increasing limit of zero percent surcharge to Taka 3 crore from the existing Taka 2.25 crore.
The FBCCI placed the proposals at the 39th Advisory Meeting of the National Board of Revenue (NBR) at Sonargaon Hotel in the city. NBR and FBCCI jointly organised the meeting.
Speaking as chief guest at the meeting, Finance Minister Abul Maal Abdul Muhith said, since the next budget will be an election year budget, there will be no new venture in it, rather emphasis would be given on carrying forward the exiting initiatives.
Muhith in his closing remarks at the NBR-FBCCI consultative meeting talked on quite a number of issues, including agro-processing industries, readymade garments (RMG), cottage industries, revenue mobilization, the number of taxpayers, poultry industries, BTCL, the state of highways, bread and biscuit factories and the problem of higher duty on import of stones.
The finance minister said the argo-processing industry is doing well in the country and it would further move forward. "Agro-processing industry should be considered one of the most important sectors," he added.
Bangladesh is quite a master in making value addition to any half-done materials, he said, adding that the country's RMG sector is currently the second in the world, but the bulk of its raw materials is not produced in the country, rather those are being import from abroad.
Muhith said over the years, the NBR has been able to come much closer to the common people and around 30 lakh people now submit their tax returns which was only 7 lakh in 1982.
Responding to various demands raised by the business community, the finance minister assured them of including IT enabled services into e-commerce, considering the matter of providing incentives on the value of direct exports, addressing the server capacity problem of the BTCL, adjusting the duty on production and import of agriculture machineries, addressing the problem of higher duty on import of stones and the duty on bread and biscuit factories.
Mentioning that the plying of heavy vehicles and large containers over the national, regional and district highways is responsible for deteriorating the road condition across the country, the veteran minister said the government is giving due importance and taking measures so that the quality of these roads and highways remain in a good condition.
NBR Chairman M Mosharraf Hossain Bhuiyan, Finance Division Secretary Mohammad Muslim Chowdhury, Bangladesh Investment Development Authority (BIDA) Executive Chairman Kazi M Aminul Islam and former FBCCI Presidents Mir Nasir Hossain, Kazi Akramuddin Ahmed and AK Azad spoke on the occasion, among others. FBCCI President M Shafiul Islam Mohiuddin delivered the address of welcome.
Citing that the existing tax-GDP ratio in the country is still low hovering at 8-9 percent, Mosharraf Hossain Bhuiyan underscored the need for raising it further.
He said there is the need to continue the momentum of the government's own financed projects alongside the aided ones to further expedite the country's development. Besides, there is also a need to take big projects.
"We need more funds to make massive infrastructural development in the country side by side continuing their maintenance. So, we've to consider this matter," he added.
The NBR Chairman said that they would try their level best to accommodate the recommendations made by the FBCCI in consultation with the Finance Minister.
Responding to the overarching demand from the business community to lower the corporate tax rate, he said balancing the corporate tax rate is the demand of present time and there is a need to rationalize it or balancing it without lowering the revenue collection.
Mentioning that the present government wants to eradicate tax fear from the taxpayers, the NBR chairman said although the FBCCI has proposed to increase the ceiling for individual tax payers to Taka 3,50,000 from the existing Taka 2,50,000, the most important thing is to rationalize it in the lower tier.
He also informed that the new VAT law will come into effect in 2019 while the system is being developed to launch the VAT Online Project.
The NBR chairman said they would expedite the process of disposing of the tax related cases speedily through the alternate dispute resolution (ADR) method.
Kazi M Aminul Islam put emphasis on entrepreneur development, measures against the rise of cost of doing business, diversifying the major drivers of the economy, not changing the policies all on a sudden, bringing necessary changes in the tax and duty structure to further promoting investment.
Shafiul Islam Mohiuddin said the existing corporate tax for all companies is 25 to 35 percent. "We proposed the government to reduce it by 2.50 percent for creating transparency in the tax system and increasing revenue," he added.
He also proposed the government to pass the new customs law in the next budget for modernising and creating a realistic business environment as per the agreement of the Customs Valuation and Trade Facilitation of World Trade Organisation (WTO).
The apex body chief said 15 percent VAT for issuing and renewing the trade license, IRC and ERC is considered as a barrier for starting a new business, so, FBCCI has proposed to abolish the 15 percent VAT.
He also recommended the NBR to form a high level committee, comprising NBR, FBCCI, DCCI, MCCI, BCI, BASIS, ICT Ministry and IMED, to finalize the VAT Online registration rules.
He also requested the government to take initiatives for regulatory impact assessment of the new VAT law through an independent organisation before implementation of the law.