FBCCI demands major overhaul of customs duty, income tax structure

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FE Report
The country's apex chamber Thursday demanded a major overhaul of tax structure in the upcoming budget, seeking a raise to minimum income tax threshold and slash duties on machinery, raw materials and intermediate goods.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has sought bringing down customs duty on capital machinery and industrial raw materials to one per cent from three per cent.
The Federation, which represents the country's all chambers and industrial groupings, also demanded five per cent customs duty on intermediate goods which are produced locally, down from the existing seven per cent.
It also proposed the minimum income tax threshold to be raised to Tk200,000 from Tk165,000, relieving hundreds of thousands of lower middle income people of a tax burden in this tough economic conditions.
The demands were made just six weeks ahead of the budget announcement for the 2009-2010 fiscal year. Finance minister AMA Muhith is set to unveil the first budget of the Awami League government on June 11 this year.
"The cuts in customs duties are needed to speed up industrialization in the country and create some badly required jobs," FBCCI president Annisul Huq said, according to a statement by the apex chamber.
Huq made the demands leading a group of top industrialists to a meeting with chairman of the National Board of Revenue (NBR) Dr Nasir Uddin Ahmed at his office.
The FBCCI president urged the government to keep its revenue collection target to a modest Tk550 billion for the next financial year and set a Gross Domestic Product growth rate at six per cent.
The apex chamber sought protection for the country's 100 plus steel and re-rolling mills by raising customs duties and imposing value added tax (VAT) on imported Mild Steel (MS) Rod, bars and finished steel goods.
"Our proposals are to make the upcoming budget business, investment and employment friendly. It should be pro-people so that it alleviates poverty and facilitates the socio-economic development," he said.
The FBCCI also demanded 25 per cent corporate tax on companies earning less than 10 million taka net profit, 30 per cent on companies earning more than that figure and 35 per cent for non-manufacturing and trading companies.
It put the stress on industrialisation, enhancing productivity, agricultural development and food security, energy and infrastructural development, social security and human resources development.
In its preliminary budget proposals, the FBCCI also sought provision in the budget to legalise undisclosed money as it argued that the government could mobilize sizeable amount of revenues through the 'out of the box facility'.
The apex chamber called for making judicious use of electronic cash register, including small and cottage industry in the sub-contracting system of the VAT.
Huq stressed proper valuation of imported goods and stringent execution of the Pre-shipment inspection (PSI) system so that dishonest traders can't evade duties and create uneven competition in the market.
He proposed a FBCCI-NBR joint price data-base for imported goods to solve problems related to valuation.
FBCCI First Vice President Abul Kashem Ahmed, Vice President Abu Alam Chowdhury and its directors and senior officials of NBR were present on the occasion.