The Metropolitan Chamber of Commerce and Industry (MCCI) on Wednesday suggested reducing the tax rate of individual taxpayers, cancelling the condition on proofs of tax return submission and strengthening the online system.
The chamber made the suggestion during a pre-budget meeting at the National Board of Revenue (NBR) office in the capital's Agargaon, said a press release.
MCCI President Saiful Islam placed a set of proposals at the meeting.
In his speech, Saiful Islam said companies are unable to benefit from reduced tax rates due to restrictions imposed on transactions.
"Though the government reduced the corporate tax rate by 2.5 per cent in the last budget, companies are unable to reap the benefits," he added.
He urged the government to cancel the condition of transactions through the banking channel and cut the use of cash.
In the last budget, the tax rate of listed and non-listed companies in the stock market was reduced by 2.5 per cent to 20 per cent and 27.5 per cent respectively.
However, to get this benefit, companies can make annual transactions up to Tk 36 lakh in cash, and any amount above that should be done through the banking channel. In addition, a single transaction limit was set at Tk5 lakh.
The MCCI president said, "Even though the tax rate of public limited companies is 20 per cent, the effective tax rate in our country becomes 40-50 per cent."
Stating that the main reason behind this is the disallowance of expense and tax deduction at source (TDS), he said, it is difficult for businesses to avail of the corporate tax cut benefits.
In the meeting, the MCCI put forth various proposals, on behalf of businesses, including 118 proposals regarding income tax, value-added tax (VAT) and customs duty.
NBR member Masud Sadiq presided over the meeting while business leaders and other senior officials related to budget preparation were present.
