Businesses at a pre-budget discussion on Thursday raised various issues including the liquidity situation in banks, arbitrary fixing of interest rate, harassment by revenue board officials and difficulties in getting export incentives.
Their observations came at the 39th Consultative Committee Meeting of the National Board of Revenue (NBR) at Sonargaon Hotel in the city. NBR and Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) jointly organised the meeting.
During the discussion, former president of FBCCI AK Azad said the bank interest rate was 10 or 9.0 or 8.0 per cent even few days back. But after taking the loan, suddenly the bank authority has sent letters to the borrowers to pay additional 4.0 per cent interest which is absurd.
"The exorbitant income tax rate of 35 per cent on garment accessories is illogical. The government has been patronising the textile and garment sector by imposing 10-12 per cent income tax rate but not the accessories," he said. The business leader suggested keeping the income tax rate for accessories same as textile and garment items.
Another FBCCI director said they do not get any loan when they approach a bank preparing any project due to the liquidity problem in banks.
"We see in media reports that the banks have no money as those are looted. But we have seen excess liquidity few days back. Where the money has gone?" he asked. The businesses cannot do business this way, he added.
Real Estate & Housing Association of Bangladesh (REHAB) President Liakat Ali said although the registration tax is 14 per cent, in reality it is 16 per cent which is very high. This must be made time-befitting.
He said the prices of basic construction raw materials like rod, cement and stone have increased. About 80 per cent stone is imported, for which 69 per cent tax and VAT have to be paid which is very high. This must be refixed.
Regarding home loan, Mr Liakat said the banks cannot provide home loans due to the liquidity problem. Besides, the single digit interest rate again reached the double digit level.
Small and medium enterprise (SME) sector representative Ali Zaman said the government must refrain from increasing the additional tax revenue collection of Tk 1.0 trillion in this year's budget as the field level officers of the NBR face a difficult situation while they harass the businesses to meet the target. He suggested keeping the amount of income tax revenue same as Tk 2.48 trillion like the previous budget.
Leather sector representative Nasir Khan said there are so many good policies for businesses but their implementation at the field level is horrible due to non-cooperation of some corrupt tax commissioners. These dishonest officials are not even held accountable for their misdeeds, for which shoes and other manufacturing materials remain stuck up at port hampering export.
He urged the finance minister to investigate the matter on a case to case basis.
Bread manufacturing association representative Jalal Uddin said earlier there was no VAT on bread and other confectionery items priced below Tk 100. But the government imposed VAT in this sector in FY 2016-17 and 2017-18. But the neighbouring country India does not have any VAT on confectionery items like bread and biscuit.
He alleged that the small businesses in his sector who submit tax returns fall victim to harassment by the commissioners. They call those small businesses on phone and ask them to communicate with them. These commissioners also harass and threaten them.
A representative of Exporters Association of Bangladesh said exporters are subject to harassment regarding cash incentive which has been made complex instead of simplifying it. But the government was supposed to make the process easy. He suggested providing cash incentive directly on the export value.
Bangladesh Association of Construction Industries representative Eng Moniruddin Ahmed said the businesses involved with construction are in a suffocating situation as the prices of rod, cement and stone bulged abnormally in last four months. The price of rod increased by 45 per cent, stone 28 per cent and cement 18 per cent while sand is literally unavailable.
Representative of Bangladesh Auto Re-Rolling Mills Association Masudul Alam said the cause of hike in rod prices is the rise of price of scrap in international markets and factors like price hike of electricity, appreciation of dollar, transportation cost, and interest rate. These have contributed to the increase of production cost of about Tk 18000.
He suggested waiving the customs duty of Tk 1500 per tonne on the imported scrap.
President of Bangladesh Reconditioned Vehicles Importers & Dealers Association Habibullah Bahar Don said they do not get depreciation facilities for more than three years although it is declared by the government for five years.
E-commerce association representative Shomi Kaiser said most of the e-commerce traders have an income of Tk 0.1 million to Tk 0.15 million a month. These entrepreneurs should be brought under information technology-enabled services (ITAS) and their income be tax-free.
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