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DCCI for 2.5% corp tax cut for non-listed firms

Staff Correspondent
06 Mar 2023 00:00:00 | Update: 06 Mar 2023 00:12:23
DCCI for 2.5% corp tax cut for non-listed firms

Dhaka Chamber of Commerce and Industry (DCCI) has urged the National Board of Revenue (NBR) to reduce corporate tax by 2.5 per cent for non-listed companies in the upcoming financial year in a bid to ensure an investment-friendly ecosystem.

This tax cut would help boost economic growth, said DCCI President Md Sameer Sattar while placing the chamber’s budget recommendations during a pre-budget discussion at the NBR office in the capital on Sunday.

He stressed an easy and business-friendly taxation system, widening the income tax and value-added tax net, full automation of taxation, and encouraging local industrialisation.

Sattar also proposed increasing the tax-free income limit for individuals to Tk 5 lakh from the existing Tk 3 lakh considering soaring inflation and increased living expenses.

Mentioning that the country’s tax-to-GDP ratio is very low as only 30 lakh tax identification number (TIN) holders submit their returns, he said the tax net should be widened to include persons residing outside Dhaka and Chattogram as most taxes are collected from these areas.

He proposed an integrated tax administration system and an integrated VAT administration system to ensure full automation of taxation and the VAT ecosystem.

The business leader recommended increasing the VAT-free annual turnover limit to Tk 4 crore from Tk 3 crore for cottage and small businesses.

“Since banks charge a 10-15 per cent tax at source on deposits, imposing excise duty on deposits and savings in addition to that will discourage depositors,” he said, recommending excise duty on bank deposits be withdrawn.

To ease the customs-related processes, he suggested implementing the National Single Window project as soon as possible, saying it will create a paperless trading system that will reduce the time and cost related to foreign trade.

NBR Chairman Abu Hena Md Rahmatul Muneem, who presided over the meeting, said the revenue board regularly arranges training for clearing and forwarding officials to reduce mistakes in using HS code. “If businessmen want, they can avail advance ruling in this regard.”

He urged the business community to be aware of using the correct HS code. He also said the NBR had taken various initiatives to simplify the process of doing business but would maintain strictness about compliance matters.

Muneem sought the business community’s cooperation to further ease the country’s business climate. “The National Single Window project will be implemented by the end of 2025.”

He also said the tax and VAT net should be widened to increase revenue generation.

Earlier in the day, business leaders of 14 organisations in the agriculture and service sectors attended another pre-budget discussion with the NBR.

Dairy farmers sought income tax exemptions for farms for the next 20 years. They also sought the withdrawal of all VAT on domestically-produced milk, dairy products, and meat.

Besides, restaurant owners proposed bringing all food businesses, including those operated on streets, under VAT registrations. They also proposed bringing all restaurants under electronic fiscal devices (EFDs) as well as fixing the VAT rate at 1 per cent for canteens in educational institutions and hospitals and 10 per cent for catering services.

Agro processors sought full waiver of advance tax on imports and exemption from the deduction of tax at source against the supply of agricultural products.

The Hajj Agencies Association of Bangladesh demanded duty-free vehicle purchase facilities while Bangladesh Association of International Recruiting Agencies sought tax exemption for registration renewal, which is Tk 50,000 at present.

Bangladesh Auto Rice Mill Owners Association sought tax exemptions for those with capital below Tk 10 crore for five years. In addition, they proposed fixing the tax rate at 5 per cent in all stages.