JS body recommends corporate tax cut
May 24, 2010 00:00:00
FE Report
The Parliamentary Standing Committee on Finance in budget recommendations Sunday said corporate taxes should be cut across the board, as the rates are among the highest in the world.
At present, financial institutions pay 42.5 per cent tax while listed companies pay 27.5 per cent and non-listed companies 37.5 per cent.
The taxes paid by banks and other financial institutions are very high and should be reduced gradually, chairman of the committee of Jatiya Sangsad (JS) AHM Mostafa Kamal said.
He recommended that the Bangladesh Bank take proper steps to rein in inflation, as it may lead the financial market to pump money into the productive sector to offset any impact of rising prices in the international market.
"A large amount of money is pumped into the capital market, but it is not utilised in the productive sector," he observed.
The committee also recommended empowering the National Board of Revenue to confiscate property, if it finds any discrepancy in tax return.
Stringent laws will help bring tax dodgers under the tax net and encourage the honest taxpayers, he said.
"Honest taxpayers are losing interest in paying taxes as tax dodgers are getting scot-free," the chairman lamented.
"The committee suggests that the government bring all the eligible taxpayers under the tax net, so that honest taxpayers feel encouraged to pay taxes," he said.
To make the industrial sector more competitive Mr Kamal said import duty on raw materials should be reduced to the zero level.
The committee views that 'undisclosed money' and 'black money' are same and the next budget should not allow any more money whitening facility.
"In the last budget, the committee supported whitening of money due to the global recession, but this year we don't need any such programme," he said.
He, however, said the government can consider allowing the facility, if the money is invested in the productive sector.
The body also recommended making tax return submission mandatory for all parliament members, upazila chairmen, mayors and commissioners, he informed.
The finance minister should not increase the tax burden, rather should expand the tax net to collect more revenue, Mr Mostafa said.
"The current GDP size is about Tk 7.5 trillion and the revenue collection is only Tk 610 billion, which is totally unacceptable," he said, adding the figure of revenue collection should increase to Tk 1.2 trillion."
About the interest rate on the national savings instrument, he said the facility should be restricted to pensioners only.
"The government has a debt burden of Tk 570 billion in NSD certificates and it is not good for the economy," Mr Kamal said.