SME Foundation seeks same tax for small ventures as RMG’s
It tabled 328 proposals on tax, VAT, tariff, and stimulus collected from 15 SMEs
The Small and Medium Enterprise (SME) Foundation has proposed the same tax rate for the SME industry as the readymade garment sector, which pays 12% tax.
It tabled 328 proposals on tax, VAT, tariff, and stimulus – which it collected from 15 SMEs – at a pre-budget discussion with the National Board of Revenue (NBR) on Tuesday.
Lutfar Rahman, an adviser to the SME Foundation and a former NBR member, presented the proposals.
He said SMEs are the lifeblood of a country's economic development and there are several lakh entrepreneurs in this sector in Bangladesh.
They will grow to become big entrepreneurs if they are given opportunities, he said.
"At present, general companies pay 33% tax. Textile, garment, and jute product companies pay 12% while poultry feed, fish feed, and dairy product manufacturers pay up to 15%.
"The tax rate is 32.5% for other small entrepreneurs, including those operating in plastics and agro-processing fields. These industries do not get new investment opportunities," explained Lutfar.
He demanded that the corporate tax rate on all types of SME products be the same as that in the apparel industry to help SME entrepreneurs flourish.
Other proposals of the SME Foundation include exempting VAT on production and marketing of agricultural machinery, reducing VAT on light engineering products, and waiving VAT on all locally collected export goods and services as well as locally produced honey.
Moreover, reducing duty on parts and materials used in manufacturing agricultural machinery, coir fibre, filler masterbatch, colour masterbatch, PVC stabiliser, stearic acid, polyethylene wax, printed melamine transfer paper, unprinted PVC, polyester, poly-amide film roll, urea resin, and thiourea resin has been demanded.
The SME Foundation believes industries will benefit and the country will go a long way towards self-reliance if these proposals are considered.
It believes light engineering, agricultural machinery manufacturing, plastics, melamine, and electrical equipment manufacturing industries will develop.
The organisation also proposed withdrawing income tax on the plastic product recycling industry, reducing advance income tax on export prices, and withdrawing advance income tax on raw material imports.
Tea association demands 12% tax
Bangladesh Tea Association, an association of tea garden owners, also participated in the discussion and demanded a 12% corporate tax rate for the tea industry like the jute industry.
It proposed exempting VAT on samples in tea sales.
But NBR Chairman Abu Hena Md Rahmatul Muneem said tea garden owners would not get any new benefits in the 2021-22 budget.
He said he had visited tea gardens in India, Nepal, and other neighbouring countries and those are neatly organised.
"But our gardens are scattered and no rules are being followed. Lands are not being used properly. I think tea garden owners will not be this careless and lands will be used properly if tax is increased," he added.
Transport groups demand VAT exemption for AC buses, launches
Earlier in the day, various transport associations, including Bangladesh bus truck owners association, Bangladesh automobiles assembling and manufacturing association, Bangladesh cargo vessel owners association, Bangladesh sarak paribahan samity, and Bangladesh launch owners association attended the discussion.
Traders in this sector demanded exemption of the existing VAT on air-conditioned buses and launches considering the losses caused by the novel coronavirus.
They also made several proposals in the areas of income tax, VAT, and tariff, including reducing tariffs on tyre imports and banning illegal three-wheeler imports.