DCCI seeks corporate tax cut to cushion LDC graduation shocks

The Dhaka Chamber of Commerce and Industry (DCCI) has asked the revenue board to reconfigure corporate tax rates so that Bangladesh can cushion the shocks of the graduation from least developed status in 2026.

The chamber proposed the government slash corporate tax to 27.5% from the current 30% in the 2022-2023 fiscal year, and a further 250 basis points cut next year.

"The rate should be in line with the regional average to maintain business competitiveness," DCCI President Rizwan Rahman told a press conference in Dhaka Sunday.

Referring to an estimated $2.5 billion export loss after the LDC graduation, he said the cost of doing business would tick up substantially with the 6%-7% newly levied tariff.

According to DCCI, Bangladesh's two major export destinations are Europe and the US – amounting to 67% of the country's total export, whereas Africa and Middle East markets remain untapped.

"After the LDC graduation, exports without duty free market access will face numerous challenges. Therefore, businesses should focus product diversification as well as exploration of new markets," said Rizwan Rahman.  

He also underscored tariff rationalisation, reduction of non-tariff barriers in cross-border trades and minimising anti-export bias.

To ensure a smooth LDC graduation, Rizwan Rahman also urged for improving competitiveness and formulating national-level strategies in this regard.

He also suggested developing negotiation skills on international trade, World Trade Organization rules and international trade laws for more free trade agreements (FTA) and preferential trade agreement (PTA) signing.

Regarding PTA and FTA signings, he said FTA is more effective and beneficial than PTA.

To cope up with the growing demand of skilled workforce in the future, he urged for investing more in research and development, re-skilling and upskilling.

On the national revenue board, the DCCI president alleged that the revenue collector is not willing to adjust any advance income tax (AIT) even during the pandemic. He also complained about harassment by revenue officials to small businesses outside Dhaka.

He said only revenue automation can stump out corruptions and hassles, and ensure better transparency and accountability.

At the press conference that was organised to detail the DCCI's plan for this year, the chamber said it will prioritise the cottage, micro, small & medium enterprises (CMSME) to improve their access to finance.

Regarding smooth stimulus disbursement to micro and small ventures, the DCCI president said the central bank should fix a mandatory lending ceiling for banks to CMSMEs.

Despite the pandemic, he said the resilience of the private sector allowed the economy to grow at 5.43% rate in 2021.

The DCCI president at the programme termed blue economy – another topic to be highlighted by the chamber this year – as an emerging sector.     

Rizwan Rahman said Bangladesh's ocean economy stands for 3.1% of the country's overall GDP. Our shipbuilding, tourism, sustainable fishing, gas and mineral potentials are still largely unutilised.

He called for drafting a national blue economy development and implementation roadmap.

The chamber Senior Vice President Arman Haque and Vice President Monowar Hossain were also present on the occasion.