FBCCI for cut in corporate tax, hike in individuals\\\' tax-free limit

The FBCCI, country's apex trade body, has proposed a set of tax measures to 'encourage' investments and check capital flight.
It has also suggested to increase tax-free limit of individual taxpayers' income and cut corporate tax in the upcoming national budget.
The FBCCI has also urged the government to include businesses' proposals in the new Value Added Tax (VAT) law, to be made effective from July 1, 2015, and resolve ambiguity in customs duty slabs.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) proposed the tax measures for inclusion in the budget for fiscal year (FY) 2014-15.
The proposals, formulated on the basis of the suggestions coming from different trade bodies across the country, will be discussed tomorrow (May 8) at a meeting of the national consultative committee on budget.
The FBCCI placed the proposals to the National Board of Revenue (NBR) recently. It placed three separate proposals for income tax, VAT and customs duty.
In its budget proposals, FBCCI said tax-free threshold for individual taxpayers being inconsistent with the living costs should be increased.
It proposed to enhance the tax-free income ceiling to Tk 2,50,000 from the existing Tk 2,20,000 for individual taxpayers considering the average rate of inflation at 9.0 per cent in the last three consecutive FYs.
The apex trade body also urged the government to set competitive corporate tax rates for encouraging local and foreign investment in manufacturing sector.
The FBCCI felt the need for taking necessary steps to attract capital investment in the country and check flight of capital.
It has sought an unbiased appeal system, popularise Alternative Dispute Resolution (ADR) by amending necessary rules and bringing commercial activity of non-governmental organisations (NGOs) under tax net.
The FBCCI urged the government to allow tax rebate on power, infrastructure development, quality management, environment protection, human resource development, agriculture and rural industry, small poultry, hatchery, dairy firm and Corporate Social Responsibility (CSR) for underdeveloped area.
To reduce income inequality, the chamber leaders proposed imposition of surcharge on progressive rate by rearranging the existing rates. Once the progressive rates are incorporated, differences between corporate tax rates and individual tax rates will be minimised. On corporate tax, the FBCCI proposed to set corporate tax rates on the basis of dividend declaration by the companies.
The chamber has sought cut of tax rate for banks and financial institutions to 40 per cent from 42.5 per cent, for publicly traded companies to 35 per cent from existing 37.5 per cent, non-publicly traded companies (manufacturing) 32.5 per cent while non-manufacturing or trading 35 per cent.
For publicly traded and non-publicly traded mobile operator companies reduction in tax rates have been proposed at 40 per cent and 42.5 per cent respectively.
The chamber proposed to cut tax rates for merchant banks to 35 per cent.
The FBCCI recommended a cut in advance income tax (AIT) on import to 3.0 per cent from existing 5.0 per cent and increase limit of turnover for Small and Medium Enterprises (SME).
On VAT related proposals, the chamber alleged that its proposals on draft VAT law had been excluded which might create complexities in the businesses.
It has sought continuation of package VAT, inclusion of micro and cottage industry in the VAT law, waive supplementary duty on manufacturing stages of local industry, etc.
For customs wing, the FBCCI proposed to resolve ambiguity in duty slabs by selecting products as per HS code, frame tax measures to keep at least 30-40 per cent difference of taxes between imported finished products and locally manufactured ones, install advance scanning machinery and create product-wise database to check under-invoicing, over-invoicing and false declaration.