Welcome to Business Outlook
Related Articles
Businesses on Sunday demanded a set of benefits, including reduction and waiver of income tax and value-added tax rates, in the forthcoming national budget for the fiscal year 2021-2022.
The National Board of Revenaue should reduce the rates of corporate income tax, source tax on export, VAT and other taxes so that businesses can survive amid the fresh wave of Covid-19 outbreak and rebound from the losses made amid an economic slowdown due to restrictions on public movement and business activities for months in 2020 to contain the pandemic, they said.
They made the demands at the 41th meeting of the budget consultative committee of the National Board of Revenue, held virtually on the day.
The revenue board and the Federation of Bangladesh Chambers of Commerce and Industry jointly organised the meeting.
FBCCI president Sheikh Fazle Fahim placed the budget proposals at the meeting for consideration in the national budget for the fiscal year 2021-2022.
‘We want a business- and revenue-friendly budget for the FY2022 keeping in mind the Covid fallout and the second wave of the coronavirus infection,’ he said.
The rate of corporate tax should be brought down to the minimum level after doing opportunity cost assessment and cost-benefit analysis for attracting more investment and creating employment, he said.
The revenue board should abolish both advance income tax (AIT) and advance tax (AT) on imports within two years.
The rate of tax deduction at source on local purchase of agricultural products from farmers should be come down to 1 per cent from current 2 per cent, he said.
He also proposed increasing the turnover limit to Tk 5 crore from existing Tk 3 crore for imposing the minimum tax at the rate of 0.50 per cent.
Mentioning the value-addition rate range from 2-6 per cent for various businesses, including dealers, distributors, retailers and first moving consumer goods, the FBCCI president demanded introduction of VAT based on value-addition for the sectors.
Income tax, VAT and customs duty system should be brought under an automated and integrated management system, he said.
Bangladesh Garment Manufacturers and Exporters Association president Faruque Hassan said that the government should reduce source tax on export of apparel products to 0.25 per cent from current 0.5 per cent and continue the rate for the next five years.
He also demanded continuation of the existing reduced corporate tax rate for the sector for the next five years, reduction in source tax on cash incentive and VAT waiver on export-related services.
Foreign Investors’ Chamber of Commerce and Industry president Rupali Haque Chowdhury said that the government should prepare a databank of small and medium enterprises for bringing them under banking services.
The government should also consider providing grant to small enterprises to help them survive considering their role in employment generation, she said.
Bangladesh Textile Mills Association president Mohammad Ali Khokon demanded exemption from payment of VAT, AIT, AT and other taxes on humanmade fibre to make the sector competitive on the global market.
He also demanded increasing of tariff value on import of fabrics to protect the local industry.
Bangladesh Plastic Goods Manufacturers and Exporters Association president Md Jashim Uddin said that the government should separate the tax policy wing from the tax enforcement wing of the NBR to avoid conflict of interest in policy formulation and enforcement.
He also demanded withdrawal of VAT on production of capital machinery and reduction in the source tax on export earnings to 0.25 per cent for all sectors.
PRAN RFL Group chairman and chief executive officer Ahsan Khan Chowdhury said that the government should withdraw the 2-per cent AIT on agricultural products, reduce import tax on raw sugar and additives used for food preparation.
Finance minister AHM Mustafa Kamal said that the government would ensure balancing between revenue collection and benefits for businesses keeping the impact of the Covid-19 outbreak in mind.
Businesses are the driving force of the economy and offering tax benefits to the businesses also help the government’s revenue collection, he said.
‘We have plans to address the distortions of fiscal measures and overhaul the revenue structure but that may not be possible due to the Covid-19 pandemic,’ he said.
The finance ministry will sit with the NBR to finalise the budgetary measures considering the proposals made by businesses, he added.
NBR chairman Abu Hena Md Rahmatul Munnem said that the NBR would prepare a business- and revenue-friendly budget that would protect the local industry, prevent tax evasion and expand the tax net.
He said that corporate tax rates could be reduced if the tax net widened and tax collection increased.
Former FBCCI president Shafiul Isalm Mohiuddin, Bangladesh Furniture Industries Owners Association chairman Selim H Rahman, Chittagong Chamber of Commerce and Industry president Mahbubur Rahman, Bangladesh Association of Software and Information Services president Syed Almas Kabir, Bangladesh Cement Manufacturers Association president Md Alamgir Kabir, Bangladesh Engineering Industry Owners Association president Abdur Razzaque, among others, spoke at the meeting.
