Keep present VAT pack until 2021

Dhaka Chamber of Commerce and Industry (DCCI) proposed that the government keep the existing package Value Added Tax (VAT) until 2021 by upward revision of the amount.
The package VAT system is scheduled to stand scrapped from July 1, 2016 with the implementation of the new VAT and Supplementary Duty Act.
In its budget proposal for fiscal year (FY) 2016-17, the chamber maintained that small and medium enterprises (SME) have yet to develop their infrastructure to adapt to the VAT system like developed countries.
The DCCI recently placed the proposals to the National Board of Revenue (NBR) for its consideration in the next national budget.
In an alternative proposal, the trade body proposed 3.0 per cent VAT to be levied for SME business and 7.0 for large businesses.
Currently, small businesses and shop owners in Dhaka and Chittagong city corporation areas pay Tk 14,000 as VAT annually while those in other city corporations Tk 10,000 and district city municipality areas Tk 7,200 and other areas Tk 3,600.
On income tax-related proposals, the DCCI's research department proposed that the minimum ceiling for tax-free income for individual taxpayers be raised to Tk 350,000 from the existing slab of Tk 250,000.
The DCCI said upward revision of tax threshold is needed due to increased cost of living and to encourage new taxpayers.
The chamber leaders also proposed scrapping the minimum tax at 0.30 per cent on companies, irrespective of profit and loss, terming it 'against the principle' of income-tax law.
For stock market-listed mobile-phone companies, the DCCI proposed that the tax rate be cut like other publicly traded companies to 25 per cent.
Currently, listed mobile companies pay tax at a rate of 40 per cent while non-listed one at 45 per cent. The DCCI proposed to exclude all chambers and trade associations from payment of income tax and keep them outside the net of Taxpayer Identification Number (TIN).
It also proposed that the slab of surcharge or wealth tax be raised to Tk 40 million from existing Tk 22.5 million.
Minimum income tax could be set at Tk 3,000 from the existing higher amount of Tk 5,000 for taxpayers in city-corporation areas while district towns Tk 2,000 and other areas Tk 1,000, the DCCI proposed.
The chamber also proposed payment of tax at 5.0 per cent in advance for filing case in appellate tribunal and 10 per cent in High Court.
Other proposals of the DCCI include increase in allowable limit of technical knowhow fee, allowing insurance agents to enjoy tax-free ceiling for individual taxpayers on their insurance commission, increase in limit of allowable perquisite to Tk 600,000 from the existing Tk 450,000. Talking to the FE, DCCI acting president Humayun Rashid said, "We have placed the proposals for next budget with a view to promoting investment in the country."
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