FBCCI for mandating TIN instead of trade licence for doing business
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has proposed making it mandatory to obtain a tax identification number (TIN) instead of a trade licence for entrepreneurs to operate any businesses, be it small or big.
The FBCCI also demands submission of TIN certificates and tax payment documents be prerequisite for any kind of business-related work in both public and private sectors, according to a written budget proposal for the fiscal 2022-23 sent to the National Board of Revenue (NBR) by the federation on Monday.
The apex trade body will formally present the proposal to the NBR at a city hotel on Tuesday.
Trade licence is a document required to get municipality services. Everyone should have a TIN certificate to do business, which will also help the revenue authority to expand its tax net, it points out.
The trade body also says the NBR should incorporate a special provision into the tax law to make collaborations among trade bodies and professionals' associations to bring more taxable persons and institutes under the tax net.
The tax rates should be lowered to increase revenue mobilisation, the FBCCI points out.
Stating that Bangladesh's current direct-indirect tax ratio is 35:65, the business body suggests reducing dependency on indirect tax, rather increasing direct tax collection.
The ratio should gradually be reversed to reduce people's living costs, it adds.
The FBCCI in its budget proposal also says the government should establish an online based single window for clearing imported goods, realising advance income tax and VAT, and making refunds of collected advance tax.
The online based service will ease business processes and reduce costs of doing business as a business entity now needs certifications and permission from 33 separate offices to do any business in Bangladesh.
The FBCCI thinks that the online based solution will also encourage more foreign direct investment to Bangladesh.
The trade body also demands indemnity for alternative dispute resolution facilitators to make this system popular as under the current process, the Anti-Corruption Commission and other government agencies have scope to take legal action against them if the government loses any revenue in any case.
In the new budget proposal, the apex trade body has sought a tax break of up to 8 years for micro and cottage enterprises with an annual turnover below Tk15 crore. The turnover tax rate should be 1%.
The current turnover tax rate is 4% for such businesses with an annual turnover of up to Tk3 crore. Those with annual sales amounting to Tk50 lakh enjoy the tax-free facility.
The FBCCI proposes fixing a 3% turnover tax for goods and 5% for service providers in the small business group, subject to their turnover not exceeding Tk50 crore.
The tax authority can fix tax rates at 4% for products and 6% for services of medium enterprises with their annual turnover not crossing Tk300 crore, it says.
The FBCCI also requests that the NBR provide reduced rates between 1% and 3% in VAT and customs duty for importing raw materials and capital machinery for all micro to large businesses.
The apex trade body demands at least an 8-year tax holiday for investment in underdeveloped areas and similar 1%-3% tax rates on imports of raw materials and capital machinery.
The FBCCI has sought bonded warehouse facilities for manufacturing sectors to promote small and medium industries, including rural and women initiatives, digital trade and export-oriented service sectors.
