Friday, May 03, 2024
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Association of Bankers, Bangladesh Limited (ABB) has sought tax exemption on income derived from provident and other pension funds to ensure social security of private workers after retirement.
ABB placed the proposal to the National Board of Revenue (NBR) at a pre-budget discussion held at NBR office at Agargaon in Dhaka on Tuesday.
Earlier, NBR issued a Statutory Regulatory Order (SRO), saying, “The tax rate on income from provident fund, gratuity fund, superannuation fund, and pension fund was fixed at 15 per cent in December for FY2023-24.” Earlier, the tax rate was 27.5 per cent.
“The income security of private jobholders is lesser than government jobholders. Apart from that, if such tax policy on provident fund continues, inequality will be further increased among these jobholders,” said ABB Chairman Selim RF Hussain.
The organisation also demanded withdrawal of mandatory requirement of proof of return submission (PSR) to open or continue term deposits. Besides, it proposes to withdraw the same provision for getting credit cards limit up to Tk 5 lakh.
Hussain said, “Due to the existing provision, the negative impact is put on the banking sector, especially on retail and Cottage, Micro, Small & Medium Enterprises (CMSME) customers.
It also urges to withdraw taxes on capital gains derived from treasury bills and bonds.
Dhaka Stock Exchange (DSE) called for a reduction of tax at sources from TREC holders. It said that Tk 50 is deposited against Tk 10 lakh at source. If it continues, it will be difficult for TREC holders to survive.
“Considering the present market situation and the effect of Covid-19, and the world economic crisis, such tax rate should be reduced to Tk 20 per Tk 10 lakh. The tax was Tk 15 till 2005,” it said.
The Chittagong Stock Exchange (CSE) said that there is no incentive to expand the capital market within the existing finance act and the market.
Besides, Bangladesh Insurance Association (BIA) has demanded withdrawal of 5 per cent gain tax on profit of policyholders.
It said that as per the Income Tax Ordinance-2014, imposing 5 per cent gain tax on the profit of policyholders of all life insurance companies in the country, the number of policyholders is continuously decreasing.
“Small policyholders in the country will be deprived of getting insurance services. Hence, withdrawal of gain tax is very important. There is no example of imposing such gain tax in most of the countries across the world including neighbouring country India,” it added.
As usual, the DSE Brokers Association of Bangladesh has submitted its budget proposal for the financial year 2024–25 where the organisation has proposed to remove tax disparity between listed and unlisted companies, including fixing advance income tax and a tax-free limit on dividend income in the interest of the capital market.
For the fiscal year 2024–25, it recommended keeping the tax-free limit on dividend income up to Tk 50 thousand which is taxable in the current fiscal year.
The organisation has also proposed to increase the tax discrimination limit on listed and unlisted companies to 10 per cent from 7.5 per cent fixed in the current fiscal year.
It said that, as a result of the 10 per cent tax gap, domestic and multinational companies will show interest in getting listed on the capital market. Domestic and foreign investment in the capital market will increase liquidity in the market and boost government revenue.
Presiding over the discussion, NBR Chairman Abu Hena Md Rahmatul Muneem said, “The government needs to enhance its capacity to combat post-LDC graduation challenges. The capacity of revenue collection will be boosted.”
“So, only tax reduction is not a solution. Rather, you should have to enhance your capacity by reducing dependency on policy support. You should also have to boost confidence of your stakeholders and enhance security of the capital market,” he stressed.
