ICAB urges NBR to digitise taxation to check graft

Institute of Chartered Accountants of Bangladesh (ICAB) has called on the National Board of Revenue (NBR) to fully digitise the country’s taxation system to eliminate corruption, lengthy process, and ensure transparency in governance.

The ICAB leaders made the call on Wednesday at a press conference after submitting the organisation’s budget proposals to the NBR ahead of the formulation of the national budget for 2023-24 fiscal year.

ICAB President Md Moniruzzaman said that the chartered accountants have been playing a significant role in bringing foreign direct investment (FDI), directly or indirectly.

“However, the tax system of Bangladesh must be digitised to widen the tax net. A revolutionary change is needed in our tax department to collect taxes smoothly. The digitalisation is needed in all aspects of the taxation system, from return submission to information on tax deducted at source (TDS) and advanced tax reduction,” Moniruzzaman also proposed.

Observing that unsolicited cost must be cut while collecting VAT and taxes, he said, “Governments of every country adopt a policy called principle of economy, which means avoidance of high expenditure in tax collection process. So, we also have to increase the tax revenue by avoiding unnecessary expenditures.”

He said our budget proposals over income tax collection are divided into three parts. Firstly, the proposals over increasing revenue and income tax ordinance; secondly, about reducing discrepancies and loopholes in the laws; and thirdly, the proposals over ensuring transparency in the enforcement of the tax laws.

Moniruzzaman said presently, the corporate tax rate has been reduced to 27.5%. But tax is deducted at source at a high rate in the case of various businesses like import of raw materials and payment of supply charges. So, in all such cases, tax deduction at source has to be rationalised.

“In order to reduce cost of production and harassment of tax payers, ICAB has proposed to waive advance tax on raw materials used by companies registered for value added tax (VAT) as manufacturers or service providers,” he said.

ICAB has proposed to provide special bond facility to facilitate export diversification, and to introduce central bond facility for exporters who are outside the bond facility, he also said.

“We can determine the duty correctly by strictly abiding by the Tariff Act and consulting the currency exchange rate,” the ICAB president said, adding, “The global market provides all the information on various commodities which can be collected by the NBR to create a database of imported and exported goods. Using the database, the NBR can make an estimate about the respective duty rates and prices of the commodities.”

He said the tariff policy, tariff rates should not be changed frequently. If long-term policies are introduced, importers will get advantage in terms of forecasting which ultimately, would brighten the image of the country.

At the press conference, former ICAB president Md Humayun Kabir said the country’s governance system must be transparent ensuring competitiveness in market. It will pave the way to collect more revenue and get more FDI.

The CEO of ICAB Shubhasish Bose said total taxation system should be reformed as the country is developing.

ICAB Vice President MBM Lutful Hadee, and council members NK A Mobin, Mohammed Forkan Uddin, Maria Howlader, and its COO Mahbub Ahmed Siddique, among others, were also present at the press conference.