MCCI for further cut in corporate tax rate

In a bid to boost more employment opportunities, the Metropolitan Chamber of Commerce and Industries (MCCI) has proposed a further reduction in the corporate tax rate for the country’s manufacturing sector and bring parity with that of the neighbouring countries.

MCCI President Saiful Islam made the proposal during a pre-budget meeting with the National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem on Wednesday.

“In the last two consecutive years, the corporate tax has been reduced by 5 per cent. However, the effective corporate tax rate in our country is much higher than that in the neighbouring countries like India,” mentioned Saiful.

“I hope that the corporate tax will be lower to bring parity with our neighbouring countries.”

Though the government has reduced 5 per cent corporate tax, traders are not getting the benefit of it due to a series of unauthorised expenditures and tax at source.

In reality, the corporate tax rate for the publicly traded companies and non-traded companies does not remain at the set rate, rather it goes up to 40 per cent to 50 per cent, claimed the business leader.

“So on behalf of the entire business community, I request the NBR chairman to reconsider the tax issue and take necessary steps to ensure benefits of reduction in the tax rate,” said Saiful.

He said the upcoming budget is very essential as special assistance is needed from the government to recover from the rough patch created by the Covid-19 pandemic in the country.

MCCI also proposed that the government cancel the advanced tax on raw materials and spare parts as well as reduce other advanced taxes from 5 per cent to 3 per cent.

Saiful Islam mentioned that the MCCI members pay over 40 per cent of overall national revenues.

The country’s biggest organisations and industrial groups including British American Tobacco, Grameenphone, Square Group, Transcom and ACI Group are members of the MCCI. So, MCCI is contributing a lot to revenue collection, according to him.

“We demand a developed revenue management as Bangladesh is going forward,” said Saiful Islam.

Neighbouring country India has recently fixed 15-25 per cent corporate tax from 22-30 per cent.

The corporate tax is 20 per cent in Vietnam and 25 per cent in China. On the other hand, the corporate tax rate is still 30 per cent in Bangladesh.

Speaking at the event, MCCI former President Nihad Kabir called upon the NBR to take action against tax dodgers.

“The NBR should start work on what tax structure will be after LDC graduation. The tax rate has to be reduced for a competitive industrial sector,” she also said.

MCCI former President Syed Nasim Manzur said there is a 0.5 per cent advanced tax on imports and it creates confusion every year. It increases one time and declines another time.

“If we look at the garment sector and others, we will see separate tax rates. It is a disparity,” he added.

Meanwhile, NBR Chairman Abu Hena Md Rahmatul Muneem pointed out that there is a logical reason to reduce the existing corporate tax rate, but there is a risk too in that case. “We have to think about the impact of reducing the tax rate,” he also mentioned.

FICCI wants cut in tax at source

The Foreign Investors’ Chamber of Commerce and Industry (FICCI) also proposed cutting tax at source against consultancy fees and technical assistant fees.

FICCI President Naser Ezaz Bijoy said the mouza-wise land price should be re-fixed. If tax is reduced and mouza-wise land price is increased, then a source of black money could be stopped.

FICCI advisor Barrister Snehasish Barua said both multinational companies and the government are affected due to high advanced tax here.