BCI for setting CMSME corporate tax at 10-15%

The Bangladesh Chamber of Industries (BCI) on Saturday proposed fixing the corporate tax rate at 10-15 per cent for the Cottage, Micro, Small and Medium Enterprise (CMSME) sector and tax at source on industrial raw material imports at 0-3 per cent in FY23.

It also urged the government to set the tax-free income limit for individuals at Tk 4 lakh due to the increase in living costs coupled with high inflation.

The proposals were made at a press conference at the BCI board room in the capital. BCI President Anwar-ul Alam Chowdhury Parvez presented the keynote.

He said the BCI was proposing setting the corporate tax rate for CMSMEs at 10-15 per cent because there were huge opportunities to pay VAT and create jobs in the industrial sector, which would directly help increase revenue.

“The CMSMEs play a pivotal role in the economy by exporting local goods after meeting domestic demand. This reduces import dependency,” he said.

He also demanded at least a five-year tax holiday for CMSMEs and young entrepreneurs as well as a 10-15 per cent tax rate afterwards.

Parvez said, “We also propose withdrawing VAT on all types of utility for the CMSMEs and advance tax (AT) on industries. The rule is AT will be refunded when the VAT return is submitted. But importers and others concerned face problems in getting this refund.”

The BCI said the turnover tax is imposed even if businesses face losses, terming it a burden. It also described setting gross profits based on sectors as illogical.

Parvez stressed digitalising taxation. “We propose the tax system be entirely digitised to encourage all to pay taxes. This will also make the system transparent and modern.”

He said controlling inflation was the main challenge in the proposed budget. “The budget has mentioned keeping inflation at 5.6 per cent, but we see no specific guidelines to implement that.”

“We think the provision of over Tk 1 lakh crore coming from the banking system to meet budget deficits will impede industrial development.”

The BCI president further said the government’s order to shut shopping malls, stores, and kitchen markets by 8pm every day in order to save electricity would shrink business ahead of Eid-ul-Azha.

“Rather, electricity and water usage should be controlled in wedding parties, mosques, and offices to reduce wastage.”