ICAB supports Tk2,000 minimum tax proposal

The Institute of Chartered Accountants of Bangladesh (ICAB) has applauded the government decision of imposing a Tk 2000 minimum tax and termed it a positive initiative to increase revenue.

“At a time when the country is facing consequences of the Russia-Ukraine war, rising commodity prices, dollar crunch, and continuous high inflation, ICAB sees the imposing of Tk 2,000 minimum income tax as a positive initiative to increase revenue,” said ICAB President Md Moniruzzaman, while addressing a press conference on the proposed budget for FY24 in the capital on Saturday.

He praised the government for allocating Tk 2,77,582 crore development budget amid the global economic uncertainties.

Snehasish Barua, founding partner at Snehasish Mahmud and Co, in his presentation on Finance Bill 2023 said that if a citizen is required to submit the tax return for receiving any government service, he would be obligated to pay the Tk 2,000 minimum tax, irrespective of the amount of his income.

Humayun Kabir, council member and former president of ICAB, said, “The minimum tax is not a new concept. Even if there is no profit in a business, the law of minimum tax collection, non-payment of interest and penalty for it is in force.”

“This tax imposition will not be unethical for cost recovery. The biggest argument for doing this is that the tax net and the number of returnees will increase,” he added.

The former ICAB president believes that opposing the minimum tax will be a self-destructing step for the business community and they will have to carry the burden, not anyone else.

During his presentation, Snehasish Barua said that the raise in income tax will bring some relief for the midlevel taxpayers. The finance bill will not impact those who have net wealth more than Tk 4 crore as the surcharge remains the same.

Barua also mentioned that the finance bill has brought the manufacturers of cooking and kitchen appliances under VAT net now.

Talking about VAT administration, he said, “Pecuniary jurisdiction of the VAT officers has been increased and the new limit is more rational. Now the number of litigations will be reduced and disposal of cases will be expedited.”

He also mentioned the negative side of the bill saying VAT authorities can ask for freezing the bank account but cannot transfer the fund to the government exchequer. It will restrict the power of the VAT authorities.

ICAB’s Vice President (Education and Examination) Yasin Miah, Vice President (Operation and Members’ Service) MBM Lutful Hadee, Council Member Maria Howlader, Council Member Mohammed Forkan Uddin and its Chief Executive Officer Shubhashish Bose, among others, were present at the event.