BIDA has projected to raise the country's paying tax score to 64.8 out of 100 from the existing 56.1 by 2021 in order to improve the nation's ease of doing business ranking.
The Bangladesh Investment Development Authority (BIDA) also projected to lift the score to 68.05 by 2022.
The BIDA made the projection in a report with a set of recommendations for improving the country's paying tax indicator in the ease of doing business index (EoDB) of the World Bank.
Talking to the FE, director of the BIDA (one stop service and regulatory reform wing) Jibon Krishno Shaha Roy said they have prepared the work plan to help achieve the target.
He said the recommended reforms, if implemented, would help lift the country's score.
On paying tax, Bangladesh's rank is currently 151 in the global index. The rank remained almost stagnant for several years due to lack of reforms in tax administration and tax measures.
Bangladesh is lagging behind most of the neighbouring countries on paying tax reforms.
In the EoBD report, the ranking of India is 115, Bhutan 15, Sri Lanka 142 and the Maldives 119, Malaysia 80, Thailand 68, Indonesia 81, Vietnam 109, Cambodia 138, and Singapore 7.
However, Bangladesh's position in paying tax index is better than those of Pakistan, Nepal and Afghanistan that ranked 161, 175 and 178 respectively.
To improve paying tax indicator, the BIDA recommended modernisation and automation of tax and VAT filing and payment/refund mechanism.
The government agency said reducing corporate tax rate to 32.5 per cent from 35 per cent will be required to improve the country's score.
It also suggested expediting the VAT refund process to upscale the score.
The BIDA recommended developing a risk profile of businesses and making audits more efficient through the developed risk management system.
It recommended the completion of corporate tax audits based on the risk profile of a business.
BIDA said time of paying tax (hours per year) could be reduced by introducing mandatory online tax returns filing and e-payment. It also recommended enacting direct tax code (2013) to update and simplify direct taxes on personal and business income.
As long-term action, BIDA recommended the amendment to the VAT law to make the payments quarterly instead of monthly. The reform of the measure would add 3.25 score in the paying tax indicator of EoDB report.
BIDA has selected 11 indicators to improve the country's position by 2021.
Talking to the FE, BIDA executive chairman Md Sirazul Islam said the existing reform initiatives have to be expedited to achieve the goal by 2021.
Responding to the FE's query, he said the target of attaining the double-digit ranking is not "ambitious" as economies of similar standing have also better ranking.
He said the BIDA has put forward its recommendations on major reforms in some indicators to the relevant agencies.
"There is a scope for making a big jump. We are lagging behind in some of the indicators, which could be improved" he said.
Last year, business reforms in three key areas-starting a business, getting electricity, and getting credit-helped the country improve its ranking.
According to the WB Doing Business 2020 report, Bangladesh has scored 45 out of 100, up by 2.5 points from previous year. In 2018, the country was ranked at 176th.
The EoDB index is considered a universally accepted comparative benchmark of business environment globally.
Former lead economist of the World Bank Dr Zahid Hussain expressed doubt over improving of country's score through such projection as ranking is made through calculating the distance to frontier score of each economy.
He, however, said the implementation of the reform plan may bring some positive results that the revenue board can do.
He said that the final decision on reform would help improve the country's doing business ranking in the WB report.
© 2024 - All Rights with The Financial Express
