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The country’s business leaders and investors urged the government to withdraw Advance Income Tax (AIT) and Advance Tax (AT) on imports and trades at the source for the fiscal year 2024-2025. This measure aims to reduce the effective tax burden and increase compatibility.
“There is no need for Advance Income Tax (AIT) and Advance Tax (AT). No need to pay them and then adjust them again,” remarked Mahbubul Alam, president of the Federation of Bangladesh Chambers of Commerce & Industries (FBCCI).
He made the remarks while attending as the chief guest at a "Post-Budget Panel Discussion" organised by the American Chamber of Commerce in Bangladesh (AmCham) at the Sheraton Dhaka hotel in Banani, Dhaka on Monday.
He also urged the government to raise the tax-free income limit to Tk 4.5 lakh from the existing Tk 3.5 lakh, adding that the government should expand the tax net by including the informal sector in the formal economy, rather than increasing the tax burden on those who are already paying taxes.
“Imposing a duty on imports for establishments in economic zones (EZs) and hi-tech parks will discourage foreign direct investments (FDIs),” he said, adding that the government should review the decision.
Former National Board of Revenue (NBR) chairman Muhammad Abdul Mazid said, “The revenue board does not have the capability to collect the amount of revenue targeted in the proposed budget. Moreover, achieving this target is challenging due to economic strain.”
"The newly enacted Customs Act and Income Tax Act primarily consist of indirect taxes. Indirect taxes affect everyone, whereas Income Tax does not. However, the Income Tax Act is also replete with exemptions and fines, which essentially act as indirect taxes. There is a lack of fundamental direct tax measures," he commented.
Dhaka Chamber of Commerce & Industry (DCCI) president Ashraf Ahmed said, “This budget is designed to control inflation and reduce budget deficit, which is a good move.”
“Budget deficit reduction is significantly changed and Corporate Tax reduction for non-listed companies is also a good thing for increasing business activities,” he commented addressing, “This year is a good time in terms of investment. If you invest, you will get positive results within a short time.”
M Masrur Reaz, chairman of the Policy Exchange of Bangladesh, moderated the panel discussion. He said, “Currently, most of the country's economic indicators have worsened. In this context, there are no surprising instruments in the proposed budget that will help achieve macroeconomic stabilisation.”
“However, the conservative growth in development expenditure to limit the money supply and control inflation is a good move. But in my view, the high targets for GDP growth, inflation control, and private investment set in the budget document are unrealistic.”
He raised the question of whether there are enough tools to keep inflation at 6.5 per cent, saying, "The commendable aspect is that the budget identifies that the country needs to manage inflation."
“Revenue target set in the proposed budget for FY25 is unrealistic. Because to meet the target, the NBR will have to collect revenue more than 30 per cent compared to the collection in FY24," he pointed out.
AmCham Treasurer and NATco Bangladesh Country Manager & Managing Director Al Mamun M Rashel said, "We believe that budget formulation and implementation should be handled by separate entities to maintain the sanctity and address key challenges, including declining foreign exchange reserves, the balance of payment deficits, energy sector demand-supply imbalances, and the struggling banking sector."
