Investors want consistent, equitable tax regime

Presenting various difficulties in the country's current tax system, local and foreign investors have demanded a consistent and equitable tax regime that ensures an investment-friendly environment.

A 5% advance income tax was imposed on the yearly turnover of the beverage products as minimum tax, which would have a huge impact on the companies in the long run, said Ta Duy Tung, managing director of Coca-Cola Bangladesh Beverages Limited, said at a post budget discussion organised by the American Chamber of Commerce in Bangladesh on Wednesday (7 June).

Previously, the advanced income tax on beverage company turnover was 0.6%.

Echoing him, former National Board of Revenue chairman Dr Muhammad Abdul Majid said if a company knows that there will be changes, it would be careful in making investments.

So tricky matters like changing policy should be very clearly reviewed. There must be consistency and continuity, he added.

Agreeing with the discussants, Planning Minister MA Mannan said, "Consistency of rules, and predictability is important."

Business leaders participating in the discussion expressed their fear that the flow of credit to the private sector will decrease due to the ongoing gas and electricity crises and the government's huge bank loan target.

Caution urged in passing new income tax law

Dr Ahsan H Mansur, director of the Policy Research Institute, urged the government to be careful about the new income tax law which is likely to be tabled in the current parliamentary session.

He said, "We need a new law – there is no question about it, but we also need to be careful."

"Is this law in line with international best practices? It should not be home-grown. I do not believe in that," said Dr Ahsan H Mansur.

The country needs an international standard tax law vetted by international tax experts who can really guide us regarding its adequacy with respect to international best practices.

He expressed his doubt about the tax administration officials' knowledge about international best practices regarding tax laws, and feared that they might ruin it with homegrown ideas.

"I will advise the government to take time and not rush it. They should consult the stakeholders before making a final decision about it. If the law does not make sense, the government should modify it or amend it before passing it," he added.