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Pre-budget discussion

Cut corporate tax rates, raise income tax thresholds: DCCI

FE Report | April 04, 2018 00:00:00

The Dhaka Chamber of Commerce & Industry (DCCI) on Tuesday made a set of proposals including slashing the existing corporate tax rates and raising income tax thresholds in the budget for fiscal year 2018-2019 (FY19).

The proposals were placed at a pre-budget meeting arranged by the National Board of Revenue (NBR) with the DCCI at NBR auditorium at the city's Segunbagicha.

Presided over by NBR Chairman Md Mosharraf Hossain Bhuiyan, the programme was also attended by DCCI President Abul Kasem Khan, Senior Vice President Kamrul Islam, Vice President Riyadh Hossain, directors Andaleeb Hasan, Hossain A Sikder, Humayun Rashid and NBR member Kanon Kumar Roy.

Placing the proposals, Abul Kasem Khan said the government should lower the corporate tax rates for different companies in phases in the next three national budgets - fiscal years 2018-2019, 2019-2020 and 2020-2021 - by 5.0 per cent, 7.0 per cent and 10 per cent, respectively.

He proposed to lower corporate tax for non-listed companies to 30 per cent from the existing 35 per cent, for listed companies to 20 per cent from existing 25 per cent and for merchant banks to 32.5 per cent from 37.5 per cent.

Corporate tax for listed banks, insurance and non-bank financial institutions (NBFIs) should be slashed to 35 per cent from the existing 40 per cent, for non-listed such companies to 37.5 per cent from 42.5 per cent, for listed telephone operator to 35 per cent from 40 per cent, and for non-listed mobile phone operators to 40 per cent from 45 per cent, he said.

"Decrease in corporate tax will give confidence to the companies to expand their businesses with fresh investment while it will also encourage them to pay tax properly," he added.

About tax-free income limit, the DCCI president recommended NBR to raise the threshold to Tk 0.3 million (Tk 300,000) for individual taxpayers from the existing Tk 0.25 million (Tk 250,000) considering the increased cost of living.

The chamber also made a call to reduce the highest income tax rate to 25 per cent from the current 30 per cent.

Besides, Abul Kasem Khan proposed to raise the ceiling of surcharge-free net wealth to Tk 50 million (Tk 5.0 crore) from the existing Tk 22.5 million (Tk 2.25cr) in the budget for FY 2018-19.

Urging for expanding value added tax (VAT) net, he said the government should continue the package VAT to ensure transparency and accountability in VAT collection.

The DCCI also demanded for increasing VAT-free annual turnover limit to Tk 12 million from the proposed Tk 3.6 million in the yet to implement 'VAT and Supplementary Duty Act, 2012'.

Mr Khan also proposed to provide tax cards in six categories in terms with tax amount paid by the taxpayers like green, green plus, silver, gold, gold plus and platinum cards.

Speaking at the programme, NBR chairman Mosharraf Hossain Bhuiyan said the government is thinking how to boost revenue income by lowering tax rates on the people of the country.

"There is no alternative to bringing more people under tax net," he said.

Talking about the DCCI's demand for decreasing corporate tax, Bhuiyan said the government has long term plan to reduce the corporate tax as the businesses are demanding a cut on such tax.

Stating that NBR will amplify its activities to bring more people under VAT net, he said there are allegations that many traders are reluctant to pay VAT while some of them are evading package VAT and some are collecting VAT from the consumers but don't submit it to the state coffer.

Among other proposals, the DCCI recommended the NBR to impose 10 per cent tax on the income of corporate dividend, suggesting that the revenue board should consider it as final tax in the next annual budget. The government should offer tax exemption for yearly education expenses up to Tk 0.12 for primary to university education level, it proposed.

Earlier, in a separate meeting with the NBR, Bangladesh Chamber of Industries (BCI) placed its budget proposals for the FY19.

BCI President Mostofa Azad Chowdhury Babu, placing the proposals, demanded to increase tax-free income threshold for individual taxpayers to Tk 0.35 million from the current Tk 0.25 million.

He also demanded imposition of 1.0 per cent import duty on all types of capital machinery and basic raw materials while the advance income tax (AIT) and the advance trade VAT (ATV) should be exempt for registered manufacturers.

Urging the government to halt under-invoicing and miss declaration during import of products, BCI recommended NBR to regularly collect sector-wise data and installing scanner and automatic weigh machine in all ports.

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