FBCCI to push for removal of source tax on agro-based essentials

The country’s apex chamber is likely to urge the government to keep all agro-based essential commodities out of the purview of source tax - in a bid to ease price burden on consumers.
In its budget proposals for the fiscal year (FY) 2023-24, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) would seek exemption from deduction of 2.0-percent tax on supply of rice, wheat, potato, onion, garlic, chick peas, gram, pulses, turmeric, maize, salt, edible oil, sugar, all types of fruits, etc.
It has said businesses procure agriculture produces directly from farmers, and so it is not possible to deduct source tax from them.The tax burden goes to end-consumers, worsening their misery while managing escalating living cost, the FBCCI has opined in its proposals - obtained by the FE.
The budget proposals are scheduled to be placed in a consultative committee meeting on national budget, jointly organised by the FBCCI and the National Board of Revenue (NBR) today (Thursday).
In the meeting, the apex chamber would propose withdrawal of the cash transfer condition for availing reduced rate of corporate tax.
It would also suggest increasing the tax-free ceiling for individual taxpayers to Tk 0.4 million, cutting corporate tax rate by 2.5 per cent, reducing source tax on apparel exporters to 0.50 per cent for the next five years, reducing tax on capital income to attract long-term investment in the capital market, offering tax exemption to e-commerce businesses for the next ten years, tax waiver on workers’ participation fund, reducing tax on goods transportation service and income from non-resident Bangladeshis, tax waiver on plastic bottle recycling, etc.
The FBCCI would propose offering special concessionary corporate tax rates on the basis of annual dividend of companies and their location.
The chamber would suggest the NBR to fix a target for the next 10 years to increase the number of taxpayers by 0.7-0.8 million on an average per year.
The FBCCI would propose bringing down the rates of source taxes to 1.0-5.0 per cent range for suppliers, as adjustment of the existing 7.0 per cent source tax requires the publicly traded companies to gain 31.11 per cent net profit and 23.33 per cent for the private limited companies, which are difficult.
The apex chamber would suggest exempting new taxpayers from audit in case of having assets up to Tk 4.0 million.
On VAT measures, the FBCCI would propose fixing 1.0 per cent VAT at retail and wholesale stages, waiving supplementary duty (SD) on ceramics products, raising taxes on tobacco, distributing electronic fiscal devices to businesses, waiving VAT on health insurance, reducing VAT on MS products, and withdrawing advance tax (AT) from raw materials and spare-parts.
The apex chamber would suggest withdrawal of excise duty on banking sector, as source tax is already imposed on bank depositors. The FBCCI would also demand withdrawal of the existing definition of ‘inputs’ in the VAT law, as it is creating complexities, and reduction of flat and plot registration fee and taxes to 5.0 per cent.
Its proposals also include conducting customs assessment on transaction value of goods, simplifying bonded warehouse facility, introducing system of undertaking on release of industrial raw materials, relaxing penalty provisions, etc.

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