No significant tax relief but business barriers to be removed

Finance Minister Amir Khosru Mahmud admits that the new government will not be able to offer significant tax relief to businesses in the upcoming budget for resource constraints, but assures removing all business barriers.
He says although the economy is going through a challenging period, the government will offer similar policy support to potential export-oriented sectors as currently enjoyed by apparel industry.
Speaking at a budget consultative committee meeting at a city hotel on Wednesday, the minister said fiscal limitations remained a key constraint despite having an intention to provide some relief.
The event was jointly organised by the National Board of Revenue (NBR) and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

He says steps will be taken to reduce the cost of doing business by addressing barriers in ports, logistics and customs within the next three months, based on recommendations from the business community.
He also highlights concerns over capital shortages among large businesses and says the issue has been raised with international financial institutions such as the International Monetary Fund and the World Bank.
The minister observes that while the ready-made garment (RMG) sector continues to perform strongly, other sectors are lagging behind. The government plans to investigate the reasons and extend similar policy support to help those sectors grow.
"We want to eliminate all obstacles to doing business. Growth in the private sector will drive the country's economic progress," he told his business audience.
Regarding the upcoming budget, he indicates that a larger budget is being planned for the next fiscal year, with a focus on quality investment in infrastructure.
He stresses that priority would be given to effective and productive spending rather than unnecessary megaprojects.
Commerce Minister Abdul Muktadir, who attended the programme as special guest, highlighted the urgent need to revitalise the private sector by addressing challenges such as energy shortages and high interest rates.
He says the government aims to stabilise struggling industries and improve the tax-to-GDP ratio.
He also emphasises formalising the jewellery and gold industry, bringing it under a regulated framework instead of remaining in the informal economy.
Referring to neighbouring countries' export performance, he told the meet that Bangladesh should be able to achieve $12-14 billion in gold jewellery exports with proper policy support and infrastructure.
"By adopting better policy management and infrastructure, the government aims to boost export potential in sectors that currently lag behind neighbouring competitors," he adds.
During the meeting, the FBCCI proposed raising the tax-free income threshold for individuals to Tk 500,000 in view of inflationary pressures. It also recommends increasing the threshold to Tk 550,000 for women and senior citizens, and setting the maximum tax rate at 25 per cent.
FBCCI Administrator Md Abdur Rahim Khan, acting secretary of the Ministry of Commerce, says these adjustments are necessary to ease the burden on taxpayers amid rising cost of living.
The session was chaired by NBR chairman Abdur Rahman Khan.
International Chamber of Commerce (ICC) president Mahbubur Rahman and former FBCCI president Mir Nasir Hossain also attended the programme.
Business leaders representing chambers of commerce and trade bodies at the pre-budget meet called for easing tax burden, facilitating tax payment and preventing corruption.
Bangladesh Association of Banks (BAB) Chairman Abdul Hai Sarker underscored the need for taking pragmatic steps to widen tax net.
There are around 0.3 million companies affiliated with the Registrar of Joint Stock Companies and Firms (RJSC), whereas nearly 60 per cent of them don't pay tax.
A digitised platform involving different stakeholders like the NBR, Land Registration, and RAJUK proposed to facilitate tax regime.
Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) President Kamran T. Rahman says they expect the budget would not be a penalising, rather a supportive one.
Referring to over 10 million registered Taxpayer Identification Number (TIN)- holders, he says less than half of them submit their returns, which indicates the weakness of tax structure in the country.
He also suggests bringing the 90 per cent of the informal sector under formal economy to bridge the gap between tax and GDP.
The MCCI president also calls for introducing easy return-submission process, lowering effective tax rate and reducing cash transactions.
Bangladesh Chamber of Industries (BCI) president Anwar-Ul-Alam Chowdhury (Parvez) told the meet the country's industrial sector was facing challenges such as an energy crisis, complexities in LC (Letter of Credit) management, and high inflation.
"As a result, small and medium entrepreneurs are particularly affected. In this situation, policy support is crucial to ensure the sustainable growth of the industrial sector."
He underscores the importance of adopting forward-looking and practical policies focusing on areas such as Automation and Artificial Intelligence (AI), Industry 4.0 and digitisation, diversification into high-value sectors, upskilling the workforce, and green manufacturing processes.
Senior Vice-President of Real Estate and Housing Association of Bangladesh (REHAB) Abdur Razzak calls on tax officials to work for the welfare of the country and the people with honesty and ethics.
He says ensuring transparency in the revenue-collection process and maintaining tolerant behaviour towards taxpayers will further improve the business environment.
He calls for reducing registration costs as per the proposal given by REHAB to the NBR.
"A correct and fair tax system plays an important role in strengthening the foundation of the country's economic development," he says.
Former minister S M Fazlul Huq says the national budget is always prepared in a typical way, which now needs to improve.
"The concept of income tax is a frightening one for most taxpayers," he observes, adding that there should be initiatives to alleviate it.
Women Entrepreneur Association of Bangladesh (WEAB) calls for preparing special fund under the upcoming budget to support woman entrepreneurs through expanding their businesses. Executive Member Parvin Momtaz presented the proposals.
She also calls for providing special incentives for woman-led startups, cottage, small and medium enterprises.
The WEAB also urges the government to provide the female-led startups with easy-term loans with durations of 5 to 10 years which they believe would increase the participation of young women in entrepreneurial activities.
Secretary-General of Bangladesh Restaurant Owners Association Imran Hassan says imprudent measures and regulation of compliant businesses have created uneven field.
"The more VAT we pay, the more pressure we have to face (from taxmen), whereas non-compliant eateries like street food always remain beyond the purview of them."
He says despite their unwillingness, sometimes businesses have to adopt illegal means mainly because of structural flaws.
He was also critical of the roles of bureaucrats and politicians for failing to play a desired role for the sake of country's businesses.
Urging the ministers to lower the VAT on their service further, he says this would help generate more revenues.
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