President of Dhaka Chamber of Commerce & Industry (DCCI) Rizwan Rahman placed the Chamber’s budget recommendations for FY2021-22 to the Chairman of National Board of Revenue (NBR) Abu Hena Md. Rahmatul Muneem for government’s consideration and to be reflected in the next proposed national budget on March 3, 2021. This year DCCI placed the proposals with a view to revival of post-covid business confidence, having an easy and business friendly tax structure, widening tax and VAT net, ensuring export diversification and encouraging local industrialization and facilitating investment friendly environment.
DCCI proposed to reduce corporate tax for listed and non-listed companies at a progressive rate of 2.5%, 5% and 7% from 2021-22, 2022-23 and 2023-24 respectively. The DCCI suggested corporate tax for non-listed companies 30% in FY2021-22, 27.5% in FY2022-23 and 25% in FY2024-25. If the government reduce corporate tax rate, it will boost local and foreign investment, Rizwan Rahman said.
DCCI also proposes to allow 10% tax instead of 20% on income of corporate dividend. Besides, if any company invest 5% of its taxable income on research and development this investment should be tax free, he suggested.
Only 24 Lakh tax payers submit their tax return out of 50 Lakh registered tax payers. DCCI therefore proposes to make the revenue structure fully automated. As per Finance Act 2020, in most cases, in the service sector, 15% VAT and VAT at source both have been deducted. DCCI wants withdrawal of this VAT cut at source. DCCI also proposes to increase the maximum limit of annual turnover of 4 crore taka and impose turnover tax based on products’ value addition or profit for the businesses who are out of VAT.
Excise duty has been imposed twice at the time of getting loan from banks, DCCI proposes to withdraw this system. The Chamber recommended to give tax exemption on investment in greenfield infrastructure projects at least for next 5 years.
International market of Bangladeshi jute is about 62%. Presently local sells of jute products do not have any VAT. DCCI suggested the NBR to keep this provision for the next 5 year.
For the leather industry, corporate tax for listed companies is 25% and for non-listed companies it is 32.5%. In order to enhance export diversification, DCCI proposed to reduce this rate of corporate tax for leather industry and allow them a chance of bond license renewal duration for 3 years like the RMG sector. DCCI also proposed tax exemption for the local manufacturers of machineries and accessories used for electric vehicle charging station.
NBR Chairman Abu Hena Md. Rahmatul Muneem emphasized on tax and revenue process simplification which will reduce complications and increase revenue generation. We have to focus on economic development. He also urged the industries and businesses to be more compliant which will create a space of belief & confidence between the businesses and revenue management. He also said that NBR will try to re-consider the proposals of DCCI before the budget.
Published on: 2021-03-03