Dhaka Chamber of Commerce and Industry (DCCI) urged Saturday the government to reduce corporate tax and surcharge on net wealth in the upcoming budget for the fiscal year (FY) 2018-19.
It made the call for reduction in corporate tax and surcharge so that the entrepreneurs could reinvest their saved money in infrastructure, Initial Public Offer (IPO), equity and other sectors.
"We have requested the government to reduce corporate tax and surcharge on net wealth. We will reinvest our saved money in infrastructure, IPO, equity and other sectors," DCCI president Abul Kasem Khan told a pre-budget press briefing held at the conference room of the trade body.
DCCI also suggested that the upcoming budget should be based on 4Es such as empowerment, encouragement, engagement and environment.
Mr Khan said private sector investment to gross domestic product (GDP) is now around 23.25 per cent. Nearly Tk 500 billion is required for one per cent increase in investment annually.
He requested the government to allow the private sector to participate in the implementation process of mega projects such as infrastructure power and energy, port and road communication on public-private partnership (PPP) basis.
"It will be confidence-building (for entrepreneurs) measures if the government reduces corporate tax and surcharge on net wealth," said Mr Khan.
He said the National Board of Revenue (NBR) has taken the issue positively in its pre-budget discussion meeting with the tax and value added tax (VAT) authority recently.
He recommended a gradual reduction in the corporate tax rate at 5, 7 and 10 per cent respectively in the FY 2018-19, FY 2019-20 and FY 2020-21.
The DCCI president also suggested reducing surcharge by 45 per cent, 60 per cent and 75 per cent gradually (three years) for investment in IPO, infrastructure, equity and other sectors.
He said 10 per cent of this amount could be invested in higher education, training and skills development of taxpayers' immediate family member(s).
The trade body also proposed withdrawal of multiple tax rates on dividend and suggested imposing 10 per cent tax on dividend instead of current 20 per cent for the corporate to be considered final tax payment.
It suggested removal of dividend from existing category 'income from other sources' and inclusion into 'business income' category and creating provision so that dividend is only taxed when it is distributed to ultimate shareholders.
DCCI suggested rationalising tax at source for engineering, procurement and construction (EPC) bidders, allowing tax rebate on research and development (RnD) spending, sustainable development goals (SDGs) related spending limit, increasing the amount of eligible investment from existing 25 per cent to 30 per cent of total income and tax exemption on incomes of non-resident Bangladeshis (NRBs) for first five years to encourage them to invest in Bangladesh.
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