NBR to slash corporate tax, says its chief

A cut in corporate income tax rates would take effect in the upcoming budget for fiscal year (FY) 2014-15 as the government found it to be one of the highest in the world, said the revenue board chief.

The National Board of Revenue (NBR) chairman Ghulam Hussain said the cut in corporate tax rates would be carried out in phases over the next five years.

"Minimum rate of corporate tax in Bangladesh is 37.5 per cent, while the highest rate of individual tax is 25 per cent. Such a wide gap between the taxes is hardly found in other countries," the revenue board chief said at a press briefing on NBR premises Thursday.     

The tax authorities would start rationalising the corporate tax rate from the upcoming FY, he said.

The government aims to bring down the corporate tax rates gradually, at least to the level of individual tax rate, he added.  

"It is a wrong notion that a significant amount of revenue would be lost with the cut in corporate tax rates. Rather, higher rates of tax discourage taxpayers," Mr Hussain added.

The NBR chairman said the tax authorities would make a five-year implementation plan for the upcoming budget on accelerating growth in revenue collection, he added.   

The board already sought budget proposals from business chambers, trade associations, government stakeholders and private think tanks by March 15.

There will be a one-and-half-month discussion with them before preparing the budget proposals. In May, a meeting of the national consultative committee on budget will be held.

Collection of progressive tax from the well-off section of the people will be prioritised in the next budget, the NBR chairman said.

On e-TIN, he said the NBR has picked a high number of new taxpayers, about 2,50,000, this year through the online TIN system. About 1.2 million taxpayers have so far registered as taxpayers on the e-TIN site.

The NBR chief explained in detail the Tk 40 billion shortfall in its revised target this year.

The aggregate target for tax revenue collection has been revised downward by 8.088 per cent to Tk 1.25 trillion from Tk 1.36 trillion for the current fiscal year following the slow pace of economic activities in the second quarter due to political unrest.

"Yet, the NBR achieved 10 per cent growth in revenue collection in July-January period over the corresponding months last year," he said.

Import duty collection posted a negative growth, while income tax and VAT wing posted 18 per cent and 14 per cent growth respectively, he added.

Responding to a query about frozen bank accounts of opposition party leader Khaleda Zia, the NBR chairman said the tax authorities release the frozen bank accounts upon application from the respective taxpayers.

"We are yet to get any such application for the frozen bank accounts, despite unofficial request in parliament three months ago," he added.

On Alternative Dispute Resolution (ADR), the NBR chief expressed his dissatisfaction with the progress and non-cooperation of some lawyers in releasing cases for out-of-court settlement.

Recently, seven facilitators have been appointed for dealing with customs-related ADR.

The NBR chairman said the board has started refurbishing the revenue administration by appointing new officials, and expansion of tax offices. The board has also overcome the long-standing problem on land of the revenue building in Agargoan with vacating of the stay order by court.

A number of new laws are in the offing. VAT and SD law is likely to be implemented from July 1, 2015, while direct tax and customs law are in the pipeline.

The NBR chief, however, expressed his dissatisfaction with poor response from the stakeholders to the draft of the direct tax law.