Corporate taxpayers deprecated some tricky tax measures in the new income tax law as 'torture' and disincentive to investors, which they fear could create fresh hurdles for the economy.
They particularly deplored the provision on penalizing corporates for failure to ensure tax compliance through collecting proof of submission of tax returns that taxmen are supposed to do.
Corporate representatives from banks, exports, telecoms, pharmaceuticals, tax lawyers, non-government organizations, mobile financial services, ICT-service providers, digital platforms and accounting professionals raised sore points at a roundtable on 'Transitioning tax compliance to digital platform', organized by SMAC IT Limited in the city on Monday.
Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) president Mahbubul Alam and Income Tax member of the National Board of Revenue (NBR) Md Iqbal Hossain, among others, attended the programme as panelists.
Snehasish Barua, Director of SMAC IT Limited, moderated the discussions at the programme where SMAC IT launched automated tax-calculation software 'Taxdo' and also an application dubbed 'TaxGuru' to help taxpayers prepare tax returns within four to five minutes.
Corporate taxpayers rued that failure in collecting Proof of Submission (PSR) would lead to imposition of higher taxes on businesses as per the latest tax law, which is "unfair".
"It is not the job of corporations to perform tax authorities' duty. In many cases, it seems impossible to collect PSR from the service receivers," Mustafa Alim Aolad, Chief Financial Officer of Reneta Limited, told the meet.
Fahim Ahmed, Chief Executive Officer of Pathao Inc, said technological adoption is comparatively lower compared to tax-return filers.
"Some 3.6 million people are submitting tax return while some 3.0 million are under digital coverage in real sense," he said.
He feels that data security and privacy of taxpayer information ought to be ensured at the time of digital adaptation.
Moinuddin Mohammad Rahgir, CFO of bKash Limited, said collecting PSR from a large band of agents becomes a difficult task without having a digital platform of the government in place.
"We have some 350,000 agents across the country. To comply with the legal provisions, the company has to furnish the proof of their tax-return submission otherwise taxmen would disallow their expenses," he said.
Shahed Alam, Chief Corporate and Regulator officer of Robi Axiata, said it's difficult to collect PSR from the clients scattered across the country and in rural areas.
"Taxpayers become shocked on sudden imposition of tax measures that came silently," he added.
He mentions that punitive measures have been imposed first before the government takes steps to encourage taxpayers to comply with.
He, however, suggests shelving the punitive measures in the tax law for a certain period to give a space to the taxpayers to get used to the new measures.
He said BTRC is not registered with NBR's VAT and tax authority, which forces telecom operators to pay high taxes without allowing refund claim.
"Such measures give a negative signal to the foreign investors too due to increased cost of doing business."
Mohammad Hatem, Executive President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), pointed out that tax officials' willingness is necessitated to digitize tax system and reduce in-person visit to the tax offices.
He thinks the new law is neither investment-nor business-friendly.
"It's nothing but 'looting' and 'torture' to business," the leading garment exporter said on a note of indignation.
Masud Rana, Deputy Managing Director and CFO of BRAC bank, noted that predictability of tax measures is required for business planning of investors, but often it came as a 'surprise'.
"There should be continuity in fiscal measures to create an ecosystem to help adaptation," he said.
Farah Kabir, Country Director of ActionAid, mentions that NGOs have to pay in cash to the grassroots-level people who don't have PSR.
"It's not possible to ensure hundred-percent electronic transaction or collect PSR from them or vendors," she told the roundtable.
She feels that there should be separate law for social-sector players, as NGOs are different in nature from corporations.
"The government entities' readiness should also be considered to ensure digital transactions. NGO affairs bureau has not been digitized yet," she said.
Snehasish Barua said electronic transaction of salary has been introduced following tendencies of some corporations to show inflated expenditures as salary payments to evade tax.
Kausar Alam, secretary of Institute of Cost and Management Accountants of Bangladesh (ICMAB), said individual taxpayers are easy target to bring under tax net while a large number of corporates left behind.
Dr B.N Dulal, president of Dhaka Taxes Bar Association, said it's difficult to implement the 100-percent salary disbursement through electronic channel in some sectors, including readymade garments.
He recommended allowing an exemption ceiling for cash transfer in the tax law.
Sohrab Uddin, president of Bangladesh Tax Lawyers Association, expressed doubt over smooth implementation of the new tax law.
Former president of Institute of Chartered Accountants of Bangladesh (ICAB) Mahmudul Hassan Khusru feels the need of a master plan to digitize tax system.
He has recommended gradual changes in fiscal measures for easy adoption.
Mr Barua said the NBR is dong Bangladesh Bank's duty to ensure cash transaction.
Iqbal Hossain said database is missing to frame fiscal measures and address grievances on the basis of analysis to ensure equity.
The NBR has a move to set up separate e-Tax unit to digitize tax department.
He said the new measure in the tax law has been imposed on a trial-and-error basis which could be amended on the basis of implementation challenges.
Shawkat Hossain Masum, head of online news of the daily Prothom Alo, said poor tax- GDP ratio is structural weakness while dollar shortage is for lack of willingness of the government to introduce market-based interest rate.
He said partial digitization would not pay off amid mounting pressure on the NBR to mobilise higher revenue.
FBCCI president Mahbubul Alam said the government should build awareness for bringing new taxpayers rather than imposing pressure on the existing taxpayers.
"There are no alternatives to automation," he said, bringing forth the problems facing businesses.
He said businesses like BSRM are facing capital shortages as they could not adjust huge volume of advance taxes.
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