Dhaka Chamber of Commerce and Industry (DCCI) on Wednesday underscored the need for widening the tax net and ensuring an automated tax system to recover the economy.
The chamber made the emphasis while placing its budget recommendation for FY2021-22, said a press release.
DCCI President Rizwan Rahman placed the chamber’s budget recommendations to National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem for government’s consideration and to be reflected in the next proposed national budget.
This year, DCCI placed the proposals with a view to reviving post-Covid business confidence, having an easy and business-friendly tax structure, widening tax and VAT net, ensuring export diversification and encouraging local industrialization, and facilitating an investment-friendly environment.DCCI proposed to reduce corporate tax for listed and non-listed companies at a progressive rate of 2.5 percent, 5 percent, and 7 percent from 2021-22, 2022-23, and 2023-24 respectively. The DCCI suggested corporate tax for non-listed companies at 30 percent in FY2021-22, 27.5 percent in FY2022-23, and 25 percent in FY2024-25.
DCCI also proposed to allow 10 percent tax instead of 20 percent on income of corporate dividend. Besides, if any company invests 5 percent of its taxable income on research and development this investment should be tax-free, DCCI suggested. Only 24 Lakh taxpayers submit their tax returns out of 50 lakh registered taxpayers. DCCI, therefore, proposes to make the revenue structure fully automated.
As per Finance Act 2020, in most cases, in the service sector, 15 percent VAT and VAT at source both have been deducted. DCCI wants withdrawal of this VAT cut at the source. DCCI also proposes to increase the maximum limit of the annual turnover of 4 crores Taka and impose a turnover tax based on products’ value addition or profit for the businesses who are out of VAT. Excise duty has been imposed twice at the time of getting a loan from banks, DCCI proposes to withdraw this system.
The chamber recommended giving tax exemption on investment in greenfield infrastructure projects at least for the next 5 years. The international market of Bangladeshi jute is about 62 percent. Presently, local sales of jute products do not have any VAT. DCCI suggested the NBR to keep this provision for the next five years. For the leather industry, corporate tax for listed companies is 25 percent and for non-listed companies, it is 32.5 percent.
In order to enhance export diversification, DCCI proposed to reduce this rate of corporate tax for the leather industry and allow them a chance of bond license renewal duration for three years like the RMG sector. DCCI also proposed tax exemption for the local manufacturers of machinery and accessories used for the electric vehicle charging stations.
NBR Chairman Abu Hena Md. Rahmatul Muneem emphasized tax and revenue process simplification which will reduce complications and increase revenue generation. He also urged the industries and businesses to be more compliant which will create a space of belief and confidence between the businesses and revenue management. He said that NBR will try to re-consider the proposals of DCCI before the budget.