The formation of 'trade facilitation department' and mandatory submission of evidence of tax payment for availing public and private services are in a slew of budget proposals Bangladesh's apex chamber has prepared.
It recommends making tax registration mandatory for all entrepreneurs, instead of trade licensing by local government, which would be considered their investment certificate.
In its package proposals for the budget 2022-23, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) proposes that the government form 'trade facilitation department' in the National Board of Revenue (NBR) through bifurcating tax-collection and tax-policy wings.
The budget proposals for the upcoming fiscal year would be submitted formally today (Tuesday) at the 42nd budget consultative committee meeting under the joint auspices of the revenue board and the apex business body.
Finance Minister AHM Mustofa Kamal is expected to attend the meeting at a city hotel-being held at the peak of pre-budget consultations for a year that still stares at lots of uncertainties stemming from the pandemic disruptions at home and the world over.
The FBCCI proposals, obtained by the FE correspondent, have separately outlined fiscal proposals for income tax, VAT and customs duty.
The federative body of country's business community recommends vesting in the proposed trade-facilitation department policy responsibilities like rationalization of the rates of customs duties, expediting release of goods, providing incentive supports for export- oriented sectors, risk management and bringing down the ratio of direct and indirect tax to 65:35 from the existing 35:65.
The FBCCI suggests bolstering the alternative dispute resolution (ADR) system, creating a feel-good fiscal-policy regime for exporting sectors, facilitating growth of local industry etc.
For micro-cottage industry with below Tk 150 million annual turnover, the apex chamber seeks tax holiday for up to eight tax years, special turnover-tax rate at 1.0 per cent and lowest tax on import of raw materials and other machinery.
The chamber body has categorised small, medium, large and industries in least-developed areas for tax benefit in the next fiscal.
The FBCCI seeks an extended bonded-warehouse facility for other industries, including small and medium industries, women entrepreneurs, and digital traders.
On income tax, the apex chamber proposes taxing only income by scrapping the existing provision of levying it on transactions, sales or receipts.
Also proposed among others are withdrawal of advance tax except for salary payments, fees, interest and dividend, avoiding double taxation, imposing tax on the basis of final taxable net income or accounting profit, and curbing discretionary power to determine allowable expenditure.
For the taxpayers not having capacity to maintain accounts as per income-tax law, a committee comprising NBR and listed accountants could be formed to assist them through sector-wise audit for determination of gross profit.
The FBCCI proposes paying more attention on large companies for VAT collection to ease burden on small traders.
It urges the government to resolve complexities in getting refund of advance tax and source VAT.
"Due to delay or not getting refund, post-production coordination chain of industries has been disrupted, triggering capital liability, cost and time of business operations and also increasing harassment," the FBCCI says.
Since July 2019, many of the companies have claimed their millions of taka worth of negative balance for this reason.
The FBCCI in its proposals alleges that VAT zones are creating pressure on taxpayers to deposit VAT without adjustment to achieve their respective targets.
It demands waiver of VAT and supplementary duty for low-income and-poor people on their daily consumable goods such as transportation of common goods, essential products, waste management, recycling, servicing sector etc.
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