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The Dhaka Chamber of Commerce & Industry (DCCI) yesterday urged the government to cut the corporate tax rate by 2.5 percentage points in the next fiscal year to align it with the regional average rate.
“If the government cuts the corporate tax rate, it will boost local and foreign investment,” said DCCI President Rizwan Rahman at a media briefing at the chamber’s office in the capital.
The corporate tax rate in Bangladesh is 30 per cent while the average rate is 29 per cent in Pakistan, 24 per cent in Sri Lanka, and 20 per cent in Vietnam, Cambodia and Thailand, according to a DCCI paper.
Rahman said after Bangladesh’s graduation from the grouping of the least-developed countries, the cost of doing business would increase and the tariff would go up by at least 6 to 7 per cent.
“So, we should look into diversifying products and markets.”
Bangladesh’s major export destinations are Europe and the US, covering almost 67 per cent of the total shipment whereas Africa and the Middle East are untapped.
“But after the LDC graduation, our export will face challenges. We have to formulate an export diversification strategy engaging all stakeholders to face the challenges,” said Rahman.
Tariff rationalisation, reduction of non-tariff barriers in cross-border trade, and minimising anti-export bias are also important in this regard, he said.
The DCCI chief stressed automation of overall taxation, value-added tax, audit, arrears management, investigation and inquiry, appeal, revenue account management, taxpayer account management, and revenue information management.
He called for ensuring convenience, transparency and equity in the Income Tax Act 2022 to make it business-friendly and simplifying the VAT refund process.
“Only automation can remove corruption and hassles and ensure transparency and accountability.”
According to the chamber, private investment came down to 21.25 per cent of GDP in 2020-21.
In order to revive private investment and attract foreign direct investment, the DCCI suggested rationalising corporate tax structure and making economic zones ready.
Rahman said cottage, micro, small and medium enterprises should get priority, especially in terms of easy access to finance.
To cope with the growing demand for a skilled workforce, he called for more investment in research and development, re-skilling, and upskilling.
He said shipbuilding, tourism, sustainable fishing, gas, and mineral explorations are largely unutilised.
In order to have a strong position in economic diplomacy, the entrepreneur suggested developing negotiation skills on international trade, issues related to the World Trade Organisation and relevant international laws for win-win free trade agreements and preferential trade agreements.
DCCI Senior Vice President Arman Haque and Vice President Monowar Hossain were also present during the event.
(TDS)
