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Tax net expansion is essential to improve the Tax-GDP ratio and the government must take steps to enhance the tax net, said experts at a programme on Thursday.
The experts made the comments at a virtual webinar titled ‘Salient Features of Finance Bill 2022-2023’ organised by the Institute of Chartered Accountants of Bangladesh (ICAB) on Thursday.
ICAB president Md Shahadat Hossain said that the government needed to take more measures to expand the tax net.
The implementation of document verification system will help achieve targeted revenue, he said.
Bangladesh is targeting an average inflation rate of 5.6 per cent in the coming fiscal year which is challenging but encouraging too.
In addition, integration and changing the definition of research and development, refinement of pre-launch costs and separate provisions for start-up businesses, will serve as motivating factors for the new generation business and creative ventures, he said.
The introduction of a 12 per cent tax rate for other general industries exporting goods and services and 10 per cent for green industry will encourage diversification of exports of goods and services.
National Board of Revenue member Abdul Mannan Shikder said that the NBR must be strengthened and automated to increase the revenue collection.
The NBR can achieve the revenue target if the fiscal steps given in the budget are possible to implement, he said.
VAT changes are business-friendly and we expect that the businesses would utilise the opportunity and help NBR to achieve its revenue goal, Shikder said.
NBR member Md Mahmudur Rahman said that the government needed to contain inflation and the best way to curb the rate was to bring maximum possible people under tax net.
He said that the government in budget encouraged businesses to transact through banking or formal channel.
MBM Lutful Hadee, council member of ICAB, and Snehasish Barua, founding partner of Snehasish Mahmud & Co, Chartered Accountants, jointly presented the keynote paper.
Snehasish said that the government had reduced corporate tax for companies other than financial ones by 2.5 percentage points subject to compliance of several conditions.
The companies can avail the rate upon the condition that all investment and expenditure in excess of 12 lakh should be made through a banking channel.
The listed entities must offload more than 10 per cent shares of their paid up capital to get the waiver.
Considering the conditions, he however raised questions on how many companies actually would be able to avail the scope.
Snehasish said that 10 per cent uniform tax rate had been proposed for all export-oriented companies up to June 30, 2028. To motivate backward industries of RMG sector, on compliance of a few conditions, the tax rate on business income for textile industries has been reduced to 15 per cent up to June 30, 2025.
For all types of exports, tax rate collection is increased by 1 per cent which is unfavourable for exporters and will reduce export earnings, Snehasish said adding that the TDS rates were raised in areas of minimum tax, hence the reduction in corporate tax rates would have less impact.
(NA)
