The National Board of Revenue (NBR) is set to develop a digital platform to help small and medium enterprises (SMEs) maintain financial records more efficiently, moving away from traditional handwritten talikhata practices, NBR Chairman Abdur Rahman Khan said on Tuesday.
Under the proposed system, businesses will be able to input their financial data online, with the platform automatically generating balance sheets.
Mr Khan shared the plan while speaking at a pre-budget discussion held at the NBR headquarters in the capital.
He also urged the SME Foundation to share its database of enterprises, stressing that such information is essential for policy support, particularly as SMEs are eligible for tax waivers of up to Tk 5.0 million.
In the absence of a comprehensive database, he suggested the foundation take the initiative to develop one.
In a written proposal, SME Foundation General Manager Mohammad Jahangir Hossain called for the introduction of a unified Preferential Tax Regime (PTR) for micro, small and medium enterprises (MSMEs) in the upcoming fiscal year 2026-27.
The aim, he said, is to boost growth and simplify compliance for the sector.
The proposed framework includes a 10-year tax holiday for new SMEs and a simplified VAT system, replacing monthly returns with annual filings based on turnover.
It also recommends green tax incentives for environmentally friendly practices and a five-year bonded warehouse facility for export-oriented enterprises to ease raw material imports.
Among its 113 recommendations covering VAT, income tax, customs and excise duties, the foundation proposed allowing SMEs with annual turnover of up to Tk 5.0 crore to file VAT returns semi-annually.
It also suggested a specific tax model for firms with turnover between Tk 1.0 crore and Tk 5.0 crore.
On income tax, the foundation recommended raising the tax-exempt turnover threshold to Tk 1.5 crore for general MSMEs and Tk 1.0 crore for women entrepreneurs.
To protect local industries, it called for higher tariffs on imported finished goods such as plastic toys, furniture and light engineering products.
Additional proposals include VAT exemptions for plastic waste recycling and higher duties on imported frozen pangas fillets.
Meanwhile, the Bangladesh Economic Association (BEA) submitted a set of proposals urging a shift in budget strategy to address emerging stagflationary pressures.
The association warned that the economy is showing signs of stagflation, with GDP growth projected at around 3.5 per cent and inflation hovering between 9.0 and 10 per cent.
Led by its interim committee convener Mahbub Ullah, the BEA emphasised the need to prioritise inflation control, revenue mobilisation and debt sustainability.
It also expressed concern over the country's tax-to-GDP ratio, which remains stagnant at around 8.0 per cent.
To improve compliance, the BEA proposed introducing a national financial identity system integrating national ID, TIN, banking and mobile financial services data.
It also recommended expanding taxation to the digital economy, including the introduction of a cross-border digital services tax, and establishing a digitised land registry linked to national identification systems.
Prof Mohammad Masud Alam, a member of the BEA's convening committee, stressed the importance of taxing cross-border digital transactions.
He noted that a growing number of services from platforms like Facebook, Meta and Google are being purchased from Bangladesh without generating local tax revenue.
Citing an example, Mr Alam said that for a $5.75 ChatGPT subscription, around $0.75 is paid as tax to a foreign country rather than Bangladesh, even though the service is consumed locally.
He suggested assessing how many users in Bangladesh subscribe to such services, noting that many may be paying around $20 per month.
Prof Alam argued that global tech companies should be brought under the tax net, even if the process begins on a small scale.
He also pointed out that transactions related to streaming and other digital services currently face little or no taxation.
The BEA further recommended a unified tax documentation framework with pre-filled returns generated through automated data integration to ease compliance.
On fiscal management, it called for reforms in the Annual Development Programme (ADP) to prioritise high-impact projects and reduce reliance on debt, noting that interest payments account for 14-16 per cent of the national budget.
It also suggested introducing an inflation-linked expenditure ceiling and cutting non-essential spending.
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