Business leaders have demanded tax reforms to create a business-friendly environment as well as special budget allocation to boost women entrepreneurship.
At a pre-budget discussion yesterday, the Metropolitan Chamber of Commerce and Industry (MCI) termed the existing tax regime an obstacle to foreign investment.
"The existing high corporate tax rates are discouraging foreign investment. We need to pay taxes on imports, various intermediary processes and, above all, on finished goods," said Barrister Nihad Kabir, president of the MCCI, while outlining a summary of his organisation's proposals at a pre-budget discussion with the National Board of Revenue (NBR) on Tuesday.
"I would like to draw the NBR chairman and important members' attention to the fact that effective corporate tax rate in our country is much higher," he said adding, "This tax rate does not stay fixed at 32.5%, rather it goes up even to 50% to 60% on some occasions, severely affecting our business and discouraging foreign investment."
A company has to submit a 10% advance deposit for appealing against tax claims before VAT commissioners and appellate tribunals, resulting in a liquidity problem, said Nihad, suggesting finding another way to resolve such issue.
He has also proposed reducing land registration fee to increase revenue collection.
Land prices in different areas set by land offices are much lower than their actual market prices. Land registration fee is also based on the prices that have not been updated for long. Thus, a portion of legal earnings from land sales remains undisclosed, he added.
Highlighting some of over 100 proposals for the next budget, Adeeb Hossain Khan, member of the MCCI budget committee, said at present, there is an opportunity for revision in settlement of tax disputes instead of the previous facility for an appeal. But the revision is not giving proper results. So, the provision of appeal needs to be reinstated."
Proposing reconsidering the decision to give incentives for revenue collection, he said, "The present law has a provision to give incentives to NBR officers who will be able to collect more revenue. Because of this, there is unequal competition among the officers, making traders victims of this."
The MCCI also proposed abolishing the provision of a company's promotional expenses up to 0.5% of their turnover.
Adeeb Hossain also suggested raising tax-free income limit for individual taxpayers, withdrawing the cap on promotional expenses, increasing permissible expenditure limit for overseas travel, making changes in financial law prospective instead of retrospective, giving tax rebates on investment allowances, paying advance tax on imports and resolving legal complexities.
Speaking on the occasion, NBR Chairman Abu Hena Rahmatul Munim said, "There are several logical proposals. By reviewing these, the next budget will be made local industry friendly."
Bangladesh-China chamber wants separate tax structure for electric motorcycles
The Bangladesh-China Chamber of Commerce and Industry (BCCCI) in another discussion demanded that a separate policy on imports of electric motorcycles be formulated as they are energy efficient.
Noting that the use of electric vehicles is increasing worldwide, the organisation has also proposed gradually reducing the tax rate on the imports of such vehicles in the country. At present, all types of motorcycles are imported under the same tax structure.
The organization also requested the NBR to adopt the 6-digit HS Code issued by the country's customs to resolve export-import issues with China.
Speaking on the occasion, BCCCI President Gazi Golam Mortuza said, "China has invested the most in Bangladesh as a single country in the last 10 years. China is also our biggest business partner."
At the same time, in a separate discussion, India-Bangladesh Chamber President Abdul Matlub Ahmed demanded withdrawal of supplementary duty on consumer goods imported from India.
Referring to India being a big trading partner of Bangladesh, he proposed making the country's land ports more operational.
Tk200cr budget allocation demanded for women entrepreneurs
The Bangladesh Women's Chamber of Commerce and Industry (BWCCI) has demanded a Tk200 crore budget allocation for women entrepreneurs affected by the novel coronavirus pandemic in the upcoming fiscal year.
In addition, the organisation sought 10 tax benefits for women entrepreneurs in the next year, including a 4% VAT on beauty parlours, food and domestic products.
BWCCI President Selima Ahmad presented the proposals at a pre-budget discussion at the National Board of Revenue (NBR) conference room in the capital's Segunbagicha area on Tuesday. NBR officials were also present at the time.
Selima Ahmad said, "Small and medium enterprise [SME] entrepreneurs are having a difficult time doing business due to the pandemic. BWCCI is placing these 10 proposals after having consulted with various women entrepreneurs."
The organisation proposed that VAT for women entrepreneurs be reduced from 15% to 4% in the service sector, especially for: boutiques, beauty parlours, catering, restaurants, food shops, and food businesses.
NBR income tax policy member Md Alamgir Hossain presided over the programme attended by, among others, NBR member Syed Golam Kibria and VAT policy member Masud Sadiq. Further, some leaders of bank insurance and financial institutions were also present.
Anti-Tobacco Media Alliance wants more taxes on tobacco products
The Anti-Tobacco Media Alliance has proposed increasing tariffs on cigarettes, bidis and zardas (tobacco products) in the next budget, noting that the tariffs on tobacco have remained the same in recent years.
In the case of cigarettes, tax collection will increase by an additional Tk3,500 crore a year if two specific tax slabs instead of the current four are formulated. At the same time, they think that 11 lakh smokers will be forced to give up smoking. They have also given evidence in favor of this.