Political unrest to affect revenue collection this year: NBR chief

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FE Report The National Board of Revenue (NBR) chairman Ghulam Hussain said Saturday the present political unrest will not only affect the current year's revenue collection but also leave its adverse impact lingering in the upcoming years. He said according to the Sixth Five-Year Plan, the tax revenue collection target would be nearly Tk 1.36 trillion for ensuing fiscal year with a growth target of 21 per cent. This will be a challenge for the board to achieve. The NBR chief was speaking at a pre-budget meeting with the Dhaka Chamber of Commerce and Industry (DCCI) leaders at the NBR office Saturday. He urged the businessmen to discuss tax-related disputes with the higher authorities of the tax offices before going to courts. "The NBR is trying to stop tax evasion through abuse of bonded warehouse facilities. Commercial imports of the products that enjoy the facility almost stopped in recent times," he said. The NBR also requested the Bangladesh Bank (BB) to look into some cases suspecting money laundering, the NBR chairman said. In some cases, Customs officials are also responsible for duty evasion as some of them release goods by imposing only 10 per cent penalty, Mr Hussain said. "We are exploring a possibility to impose a minimum tax on trade licence-holders under the rules of obtaining mandatory Taxpayer Identification Number (TIN)," he added. The taxmen will thus be able to check status of businesses of the trade licence- holders, he added. In the meeting, DCCI president Md Sabur Khan placed the chamber's budget proposals for fiscal year 2013-14. The DCCI proposed to increase tax-free limit for individual taxpayers to Tk 3,00,000 from Tk 2,00,000, reduce rate of surcharge to 5.0 per cent from 10 per cent and set its ceiling to Tk 50 million from existing Tk 20 million. The chamber also sought a cut in corporate tax for listed companies from 27.5 per cent to 15 per cent and off-loading of shares of non-listed companies in the capital market. The DCCI also proposed to consider CSR expenditures of companies as loss-profit to encourage their initiatives, cut Advance Income Tax (AIT) to 3.0 per cent from 5.0 per cent and consider it as final tax on the import. It proposed the government to honour the taxpayers, who paid the highest amount of AIT, withdraw tax on local letter of credit (L/C) and extend tax holiday facilities for poultry, fisheries, dairy farm and handicrafts until 2025. New entrepreneurs should get tax benefit at least for first three years of their business, the chamber said. It urged the NBR to rationalise duty structure for protecting local industries, avoid changing fiscal measures in the middle of a fiscal year, and form a national committee on rationalisation of tariff. For turnover tax, the DCCI proposed to increase annual turnover for small businesses to Tk 10 million from Tk 7.0 million and cut tax rate by 1.0 per cent. "Taxmen impose tax estimating 10 per cent growth of businesses but businesses that enjoy the turnover tax facilities usually do not make such profit," the DCCI said. The DCCI made a plea to set VAT on the basis of market price, scrap Advance Trade VAT (ATV) system, waive duty on raw materials suppliers, rents of house, transportation bills and reduce turnover tax on computer and computer equipment. The chamber body also proposed to keep package VAT system and rates unchanged in wholesale and retail level. NBR Member Farid Uddin said collection of consumption tax is not satisfactory as its major part comes from tobacco and some big companies. "If we exclude the sectors then we can see only Tk 210 billion consumption tax coming from businesses," he said. DCCI Director Khairul Mazid Mahmud urged the NBR to reduce rates of tax for whitening undisclosed income. Currently, taxpayers have to pay 35 per cent tax for legalizing their undisclosed income. "We raised the issue to the Prime Minister and got assurance to formalise the undisclosed income paying 15 to 16 per cent tax through negotiation with taxmen," he said. Another director of the chamber Haider Ahmed Khan also proposed to make the process of declaring undisclosed income simple.