The initiatives taken by the government in the proposed budget and in the tax law will affect all types of investors but foreign investors will be affected the most, said Naser Ezaz Bijoy, the president of the Foreign Investors' Chamber of Commerce and Industry (FICCI).
"A conducive environment was needed for investors in the current [economic] situation. The policy that was needed is not reflected [in the proposed budget and income tax law]," he said in a press conference at a hotel in Banani of the capital on Wednesday.
The FICCI president said, with emphasis on stable policy, there should be a clear roadmap on what the tax rate will be in the next three to five years.
The apex body of foreign investors highlighted a number of measures taken in the budget and the new income tax bill, which will increase costs for investors such as increasing the minimum tax on beverage turnover by 800%, imposing a carbon tax on individuals as well as companies having multiple vehicles, making cashless transactions compulsory without creating the entire ecosystem, tax on interest on foreign loans, increasing excessive tax on property, VAT on mobile phone production.
Naser Ezaz Bijoy, who is also the chief executive officer of Standard Chartered Bangladesh, said, "Black money is transacted mainly through property [land and flat] trade. On behalf of FICCI, we said that tax reduction on property transfer would encourage people to show income. But instead, a double tax was imposed. This may further encourage tax evasion."
Regarding the imposition of tax on foreign loan interest, he said "It will discourage the institutions to take foreign financing and the burden of the additional tax will be passed on to the consumer."
Sazzad Rahim Chowdhury, the director and CFO of Berger Paints Bangladesh Limited, said, "Previously, any company's losses could be carried forward, this is not the case in the new law. If it is taxed, the business will not survive."
The benefit of individuals will be reduced by taxing the interest of the provident fund. Besides, the minimum tax system has been maintained and, in some cases, increased. If the effect of any policy is not prospective, but retrospective, it will hurt businesses as a whole, he added.
FICCI has 205 members, from whom 30% of the country's income tax comes, according to the organisation.
At the event, FICCI consultant Snehasish Barua gave details about the proposed budget and income tax law changes on behalf of the FICCI.
FICCI Executive Director TIM Nurul Kabir, Senior Vice President Deepal Abeywickrema, and Executive Director Abdur Rashid were present at the event among others.