Suggest ways to plug loopholes, check tax gap

The National Board of Revenue (NBR) chairman Ghulam Hussain urged the businesses to help the government by suggesting ways to plug loopholes for checking a substantial amount of tax gap.
He said there is no alternative but to increase tax revenue collection from domestic sources to achieve the targeted GDP growth, about 7.3 per cent, in the next fiscal year.
The revenue collection target will reach Tk 3.0 trillion after five years, the last year of the incumbent government's tenure, to materialise the vision to be a middle-income country by 2021, he said in a pre-budget meeting with the Foreign Investors' Chamber of Commerce and Industry (FICCI).
FICCI president and managing director of Berger Paints Bangladesh Limited Rupali Chowdhury proposed to impose tax measures through dialogue to make those friendly to the foreign investors.
"There should be a win-win situation and level-playing field for both local and foreign investors," she said.
She said FICCI is the brand ambassador of foreign investors. So the government should sit with its members to devise measures for attracting more Foreign Direct Investment (FDI) to the country.
"Currently, foreign investors are being discouraged by long procedures in registering their proposals and obtaining environmental certificates etc."
The chamber can play an effective role to help investors resolve these problems, she added.
Shehzad Munim, the first Bangladeshi managing director of BATB, said, "FDI is unquestionably a major driver of GDP growth and economic vibrancy of the country. Without ensuring predictability and proper implementation of taxation policy it will be extremely challenging for foreign investors to continue investment in Bangladesh."
"The government and specially the Prime Minister should step up firmly to ensure predictability and right enforcement of taxation policy for offering a sustainable investment climate to the foreign companies."
"If the government doesn't do anything in this regard, the future of foreign investment will be a big question mark," he said.
The BATB MD also shared his concern regarding the recent retrospective demands, sent by LTU of NBR to BATB, though all the price approvals have been duly sanctioned by the revenue board.
The NBR chairman acknowledged the concern to be valid and recommended that proper direction needs to be provided to the field officials with regard to the practicality of retrospective tax claims.
In such cases it should not be retrospective with effect from past years. Rather it could be from the date when last price approval was sanctioned by NBR, he opined.
NBR will sit with the finance minister next month after wrapping up the series of month-long pre-budget meetings with the businesses, he added.
Representatives of Nestlé, Singer, Berger, GlaxoSmithKline, Reckitt Benckiser and G4S, among others, also placed their proposals on income tax, value added tax and customs duty-related issues.
The FICCI leaders said corporate tax rate is quite high in Bangladesh. But effective rate is much higher, adding 5-10 per cent more, as taxmen disallow a substantial amount of shown expenditure in the tax files.
They also sought tax benefit on transfer of technical know-how, royalty, import of services, and household goods etc.