Businesses for tax rate cut, thrust on power sector
Sunday, 18 April 2010
FE Report
Business leaders have proposed to reduce tax rates and take the tax regime to upazila level to broaden the net to collect more revenue for the next fiscal.
They also suggested the government to give maximum importance to power sector, easing traffic jam, introduction of land management system and population control in the next budget.
They were speaking with Finance Minister Abul Maal Abdul Muhith at a discussion meeting organised by Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Saturday.
FBCCI President Annisul Haq in his presentation put forward macro and micro level proposals of the apex trade body before the finance minister to consider in the next budget.
The business leader said public private partnership (PPP) can be a very good platform to raise fund for energy and infrastructure projects.
"The government earmarked Tk 25 billion (2,500 crore) for PPP but even a single penny is yet to be spent because of the absence of guidelines," he lamented adding, "take decision within three months."
Most of the children in the country are malnourished which means that the next generation will be feeble. "Take immediate action to ensure nutrition for the children."
Land for agriculture and industry is shrinking everyday and there should a proper land management policy for the optimum use of scarce resource.
Without setting up special economic zones, it is not possible to attract foreign direct investment, he said adding, "Capital market development should be considered to be a key component in the budget."
He put forward some specific proposals including increasing the tax waiving ceiling to Tk 0.2 million from Tk 0.165 million.
Corporate tax structure should be revised and it will lead to more revenue collection, he hoped. "For listed companies the tax rate should be 25 per cent, non-listed 30 per cent and banks and financial institutions 40 per cent."
Many business establishments are facing problems with the National Board of Revenue over fixation of gross profit and it should be made easier, he said.
Import duty structure should be revised to 1.0 per cent for raw materials and capital machinery, 3.0 per cent for intermediate goods, 12 per cent for essential consumer goods and 25 per cent for finished goods.
The finance minister said judiciary will be inducted in the tax tribunal to ensure transparency in the dispute settlement process.
"Value Addition Tax Act will be reformed by the next fiscal," he said.
The tax system should be in line with 'goods and services tax' instead of the existing tax system to comply with open market trade regime, he added.
About the tax reduction in banks and financial institutions, he said they have over exposure in the stock market and they don't pay any tax on capital gain.
"Their exposure to market should be reduced and the government will think over imposing tax on capital gain," the minister said.
Mr Muhith said tax card is likely to be introduced in the next fiscal.
About import duty, he said the objective of the government is to liberalise the market and in this context, the proposal put forward by the FBCCI should be assessed carefully.
ADP implementation is the responsibility of the ministries concerned and they have the authority to release funds for July-March period without the consent of finance ministry.
"In the last quarter, they come to finance ministry to get the release order for record's sake so that the ministry has a clear idea how much money is disbursed in the fiscal," Mr Muhith said.
Former adviser to the caretaker government AB Mirza Azizul Islam said sectoral or geography-based subsidy would increase corruption and the government should overhaul the entire subsidy regime.
He proposed that tariff fixation of fuel should be based on import price of the primary raw materials as it will reduce the hassle of reviewing the price every three months.
Mr Aziz said per capita development expenditure is less where poverty rate is high and vice versa. "It should be considered carefully and the government should spend more on the poverty prone districts."
Commerce Minister Faruk Khan said alternative dispute resolution should be in place to recover billions of tax money.
He said there are many Bangladeshi businessmen who have the ability to invest abroad and they should be allowed to do so.
"It will brighten the image of the country," he added.
Chairman of the Parliamentary standing committee on finance AHM Mostafa Kamal said now all the countries in the world have positive growth, but Bangladesh is the only exception.
"We have over 6 per cent negative export growth and the main reason is power crisis," he said.
People are ready to pay tax but their fear should be removed and payment system and procedure should be simplified.
A large number of businessmen and government officials attended the programme.
Business leaders have proposed to reduce tax rates and take the tax regime to upazila level to broaden the net to collect more revenue for the next fiscal.
They also suggested the government to give maximum importance to power sector, easing traffic jam, introduction of land management system and population control in the next budget.
They were speaking with Finance Minister Abul Maal Abdul Muhith at a discussion meeting organised by Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Saturday.
FBCCI President Annisul Haq in his presentation put forward macro and micro level proposals of the apex trade body before the finance minister to consider in the next budget.
The business leader said public private partnership (PPP) can be a very good platform to raise fund for energy and infrastructure projects.
"The government earmarked Tk 25 billion (2,500 crore) for PPP but even a single penny is yet to be spent because of the absence of guidelines," he lamented adding, "take decision within three months."
Most of the children in the country are malnourished which means that the next generation will be feeble. "Take immediate action to ensure nutrition for the children."
Land for agriculture and industry is shrinking everyday and there should a proper land management policy for the optimum use of scarce resource.
Without setting up special economic zones, it is not possible to attract foreign direct investment, he said adding, "Capital market development should be considered to be a key component in the budget."
He put forward some specific proposals including increasing the tax waiving ceiling to Tk 0.2 million from Tk 0.165 million.
Corporate tax structure should be revised and it will lead to more revenue collection, he hoped. "For listed companies the tax rate should be 25 per cent, non-listed 30 per cent and banks and financial institutions 40 per cent."
Many business establishments are facing problems with the National Board of Revenue over fixation of gross profit and it should be made easier, he said.
Import duty structure should be revised to 1.0 per cent for raw materials and capital machinery, 3.0 per cent for intermediate goods, 12 per cent for essential consumer goods and 25 per cent for finished goods.
The finance minister said judiciary will be inducted in the tax tribunal to ensure transparency in the dispute settlement process.
"Value Addition Tax Act will be reformed by the next fiscal," he said.
The tax system should be in line with 'goods and services tax' instead of the existing tax system to comply with open market trade regime, he added.
About the tax reduction in banks and financial institutions, he said they have over exposure in the stock market and they don't pay any tax on capital gain.
"Their exposure to market should be reduced and the government will think over imposing tax on capital gain," the minister said.
Mr Muhith said tax card is likely to be introduced in the next fiscal.
About import duty, he said the objective of the government is to liberalise the market and in this context, the proposal put forward by the FBCCI should be assessed carefully.
ADP implementation is the responsibility of the ministries concerned and they have the authority to release funds for July-March period without the consent of finance ministry.
"In the last quarter, they come to finance ministry to get the release order for record's sake so that the ministry has a clear idea how much money is disbursed in the fiscal," Mr Muhith said.
Former adviser to the caretaker government AB Mirza Azizul Islam said sectoral or geography-based subsidy would increase corruption and the government should overhaul the entire subsidy regime.
He proposed that tariff fixation of fuel should be based on import price of the primary raw materials as it will reduce the hassle of reviewing the price every three months.
Mr Aziz said per capita development expenditure is less where poverty rate is high and vice versa. "It should be considered carefully and the government should spend more on the poverty prone districts."
Commerce Minister Faruk Khan said alternative dispute resolution should be in place to recover billions of tax money.
He said there are many Bangladeshi businessmen who have the ability to invest abroad and they should be allowed to do so.
"It will brighten the image of the country," he added.
Chairman of the Parliamentary standing committee on finance AHM Mostafa Kamal said now all the countries in the world have positive growth, but Bangladesh is the only exception.
"We have over 6 per cent negative export growth and the main reason is power crisis," he said.
People are ready to pay tax but their fear should be removed and payment system and procedure should be simplified.
A large number of businessmen and government officials attended the programme.