Md Joynal Abedin Khan
Different trade bodies on Saturday urged the National Board of Revenue (NBR) to digitalise all the tax payments to rid the system of shady transactions from the Fiscal Year 2021-22.
They also urged the government to ensure tax-friendly and industry-friendly budget from the next fiscal year.
The discussants also hoped that the next budget will have special focus on Value Added Tax (VAT), infrastructure, industry and trade as well as financial sector.
They came up with the call at a virtual discussion titled “Pre-Budget Discussion for FY 2021-22” organised by the Dhaka Chamber of Commerce (DCCI) in cooperation with Daily Samakal and Channel 24 on Saturday.
Md. Jashim Uddin, Vice Chairman, Bengal Group of Industries, said the contribution of industry sector to the economy came down to 8 per cent from the targeted 14 per cent as the country is hit hard by coronavirus pandemic.
“Next budget should give incentives to the industrial sector for employment generation,” he said adding that all the problems involving tax, VAT and other surcharges need to be solved.
Besides, he urged the government to slash the corporate tax for export-oriented industries, calling for strengthening backward linkage industry.
For the safety of local industries, he suggested to impose antidumping and countervailing duty if needed.
Calling for reforming the tax policy, he sought digitalization of tax payment system to put an end to the illegal transactions.
The discussion, presided over by the DCCI President Rizwan Rahman, was attended by Mashiur Rahman, Adviser to the Prime Minister on Economic Affairs and Hossain Zillur Rahman, Chairperson at BRAC, as special guests.
Mashiur Rahman said the stakeholders should arrange budget discussions all the year round and the government should focus on increasing revenue collection.
“The government needs to tap all the resources to maximise the growth and revenue target should be attained without hampering economic activities,” the advisor said.
The government needs to facilitate and incentivize the businesses. However, if revenue target is not achieved, development work will be hampered, he added.
“Our tax-GDP ratio is comparatively low because our tax elasticity is lower due to rebates in different levels. To make the tax regime business-friendly to quarters, tax, VAT, Supplement Duty (SD) and Customs Duty rates need to be reformed,” he added.
He also said that frequent changes in tax rates may hamper business growth. He suggested gradual hike in tax, mentioning a minimum timeframe.
Chairperson of BRAC Hossain Zillur Rahman said that the next budget should also have a recovery plan from COVID-19 crisis.
Disbursement of loan under stimulus for CMSMEs should be faster and in that case mobile financial services can be engaged as a delivery vehicle.
“Domestic market needs to be incentivised apart from the export sector as the domestic economy will be a growth driver,” Zillur Rahman said.
“We need a transition from cheap labour economy to skilled labour economy and a game changing policy review needs to be framed,” he added.
DCCI President Rizwan Rahman in his welcome address hoped the government will surely consider a business, revenue and industry friendly budget this year.
And the budget will have a clear indication for the economic recovery amidst the pandemic.
He hoped that the next budget will have special attention to taxation and VAT policies, infrastructure, industry and trade development.
Industrial Promotion and Development Company CEO Mominul Islam said that non-banking institutions are facing challenges now and the government should reduce corporate tax for Non-Bank Financial Institutes.”
Rahel Ahmed, CEO of Nagad, suggested to incentivize the mobile financial services and to increase smartphone penetration in the country.
Kazi Inam Ahmed, President, Bangladesh Supermarket Association, complained that they have to pay extra VAT of 5% which needs to be reviewed.
Professor of BUET and energy expert Dr. Mohammad Tamim said energy linkage and power connections are needed for 100 EZs including roads connectivity.
Md. Masudur Rahman, Chairman, SME Foundation, said corporate tax for accessory industries is now 32.5% that needs to be reduced.
Member, Customs Policy & ICT, NBR Syed Golam Kibria said the revenue board aims to earn Tk 1 lakh crore in customs duty in next fiscal year.
Masud Sadik, Member of VAT Wing of NBR, said they were focusing on automation of VAT returns. We had only 48,000 offline VAT returns and in future offline VAT return system may be phased out to ensure more transparency.
Md. Alamgir Hossain, Member of Tax Wing of NBR, said government’s expenditure comes from revenue income and it always tries to facilitate the businesspeople.