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Corporate tax may see cuts, says NBR chief

IT cos, electronic manufacturers seek industry-friendly budget

FE Report | April 19, 2018 00:00:00

The National Board of Revenue (NBR) chairman Md Mosharraf Hossain Bhuiyan on Wednesday said the revenue authority will provide necessary trade facilitation to the local electrical and electronic manufacturers and IT companies in the next budget.

Hoping that Bangladeshi companies will export locally manufactured electronic and electrical products in near future, he also said the NBR will continue its support to the companies interested to establish manufacturing units in the country.

The NBR chairman made the pledge following budget proposals placed by different associations of electronic and electrical product manufacturers and importers, Information Technology (IT) companies and internet service providers at a pre-budget meeting held at the NBR auditorium in the city.

Representatives from Bangladesh Association of Software and Information Services (BASIS), Bangladesh Computer Samity (BCS), Bangladesh Mobile Phone Importers Association (BMPIA), Bangladesh Electrical Merchandise Manufactures Association (BEMMA), Internet Service Providers Association of Bangladesh (ISPAB) were among others, present at the meeting.

Mentioning growing demand for local electronic products in the country, Mr Bhuiyan said many of the local companies have come forward to set up manufacturing plants in the country. The government is also encouraging them with various facilities including tax exemption and trade protection, he added.

He also said majority of the trade bodies demanded corporate tax cut in the next budget for 2018-2019 fiscal while the government is also considering the issue closely.

He said, "Some people say that a cut in the corporate tax will create shortfall in the revenue target but we think it will rather encourage more companies to pay the tax properly."

Talking about achieving the current fiscal's revenue target, NBR chairman said, "Some think-tanks said that there will be a deficit of Tk 0.5 trillion against the revenue target of Tk 2.48 trillion during the current fiscal; but we think that the shortfall will not be so large as feared because, we still have more than two months to complete the current fiscal year."

Pressing the budget proposals of BASIS, its president Syed Almas Kabir said VAT deduction at source (VDS) and tax deducted at source (TDS) should be fully waived for local software and IT service including the internet service providers or ISPs.

He said the government should simplify the procedure of getting tax exemption certificate for the software and IT service providers.

Besides, the validity of the certificates should be extended till 2024 instead of yearly renewal as the government has provided tax exemption to the sector till 2024.

BASIS president also said e-commerce, online shopping, IT training, information technology enabled services (ITES) consultancy, software consultancy, and annual software maintenance contracts (AMC) should be tax-free by considering these as IT-enabled services.

He also proposed to provide three years grace period to the startups to submit first tax return as most of these enterprises begin their businesses with small investments.

Speaking at the programme, BCS secretary general Mosharaf Hossain Sumon demanded slashing Advance Trade VAT (ATV) on the sale and supply of imported computer and its other accessories from 4.5 per cent to 3.0 per cent and continuing VAT exemption on these products till 2021.

He also proposed duty and VAT immunity on computer products like monitor (up to 28 inches), UPS (up to 2000va), WiFi and WiMax router and LAN card.

Mentioning that seven companies are going to set up mobile phone manufacturing plants in the country, BMPIA president Ruhul Alam Al Mahbub proposed to reduce duty on locally manufactured mobile phones from 16 per cent to 1.0 per cent in the budget for 2018-2019 fiscal to encourage the investors.

Referring to only 1.0 per cent growth in the imported smartphone market last fiscal, he proposed to slash total tax incidence (TTI) from 30.19 per cent to 22.19 per cent in the next budget.

ISPAB representative Shuvra Sarker demanded VAT waiver on the office rent of ISPs and removing 10 per cent customs duty (CD) on internet modem, ethernet interface card, computer network switch, hub, router, server, and other internet equipments.

He called for abolishing existing 12 per cent Tax Deducted at Source from the revenue of internet service providers (ISPs).

He also proposed to lower corporate tax on ISPs from existing 35 per cent to 10 per cent.

Venture Capital and Private Equity Association of Bangladesh (VCPEAB) representative Marzanul Islam called for removing existing 2.0 per cent stamp duty on alternative investment fund.

He also proposed for total tax exemption or reduced income tax rates for the alternative fund management companies or venture capital companies for 10 years as earnings of these companies are still very small.

Representatives from Cyber Cafe Owners Association of Bangladesh (CCOAB), Bangladesh Television Manufacturers Association (BTMA) and Bangladesh Refrigerator Manufacturers Association (BRMA) were also present at the programme.

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