Ctg businesses seek cut in VAT by half

CHITTAGONG, May 7: Businesses in the port city made on Thursday a set of proposals including reduction of VAT (value added tax) from 15 per cent to 7.5 per cent to encourage taxpayers.
They also suggested raising the existing ceiling on wealth tax and the tax-free income threshold for individual taxpayers in the upcoming budget.
Chittagong Chamber of Commerce and Industry (CCCI) and Chittagong Metropolitan Chamber of Commerce and Industry (CMCCI) made the proposals in separate meetings with National Board of Revenue (NBR) chairman Nojibur Rahman and other board members.
NBR member (duty policy) Md Farid Uddin, NBR member (tax policy) Parvez Iqbal and NBR member (Vat implementation and IT) Md Enayet Hossain, income tax commissioners of Chittagong region, directors of the CCCI and CMCCI, representatives of BGMEA and BKMEA, among others, were present.
Representatives of C&F Agents Association, Ship Breakers Association, Agro-based Industry Association, Tax Lawyers Association, REHAB members, steel re-rolling mills, Khatunganj Trade and Industry Association, Fresh Fruits Exporters Association, Deep Sea Fishers Association and Small Shoe Industry Owners Association were also present in the meeting.
CCCI president Mahbubul Alam said there was a provision of audit under Section 82BB/3 on submitted income tax return, but there was no specific guideline. So, the taxpayers were facing harassment at the hands of tax officials. He urged the NBR chairman to arrange formulation of specific regulations in this respect.
The chamber leader said the existing tax-free individual income ceiling should be raised from Tk 220,000 to Tk 275,000.00 and in the case of women it should be raised from Tk 275,000 to Tk 350,000 because of the monetary inflation. The same should be raised from Tk 350,000 to Tk 400,000 for the males above 65 years of age and the physically-challenged people.
He said the CCCI submitted 81 duty-related, 20 Vat-related and 42 income tax-related proposals for consideration of the NBR. The proposals include reduction of tax on the 800-1200 CC CBU cars, reduction of supplementary tax on four-stroke CKD motorcycle up to 250 CC and mandatory BSTI certificate on imported goods that are also produced in the country.
The proposals also include making the old statutory regulatory order (SRO) effective as issuance of the new SAFTA SRO takes much time and imposition of 1.0 per cent duty on used laboratory articles in the steel industry and withdrawal of Vat, AIT and ATV.
CMCCI president Khalilur Rahman suggested measures for protecting the local industries, because the local industries could not close their plants any time for the sake of job security of the local workers as the foreign investors can.
He said that high rate of corporate tax discourages investment. "Our corporate tax is considered the highest in this region." If the authorities reduce corporate tax, it will enhance both investment and employment. On the other hand, the high rate of corporate tax encourages capital flight from the country, he added.
Mr Rahman said the process of tax realisation should be made easy and the net of tax should be widened. The authorities should enhance the amount of tax realisation by identifying new taxpayers.
CMCCI vice president AM Mahbub Chowdhury said the NBR has taken many positive steps but there is a deficit of trust among the people due to lack of sufficient transparency, resulting in losing a big amount of payable revenue.
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