Finance Minister AHM Mustafa Kamal has proposed reducing corporate tax rates in Bangladesh.
The minister also said revenue would increase if the tax net could be increased by fixing the tax rate in coordination with the neighbouring countries.
He was addressing the award ceremony of the best taxpayers for the financial year 2019-20 at the conference room of the National Board of Revenue (NBR) on Thursday.
The NBR this year awarded 85 people and organisations, including city corporations and districts, as the best taxpayers in 36 categories for their contribution to the development of the country.
The finance minister said people do not want to pay taxes if the rate is high. We have to consider what rate will not harm the taxpayers for paying their taxes.
"Traders have been complaining that the tax rate for corporate bodies in Bangladesh is much higher than in competing countries. At present, listed companies are required to pay 25% corporate tax while unlisted companies pay 35%. Companies in some sectors, including banking, insurance and telecom, have to pay up to 45% corporate tax," he added.
Quoting a recent study of multinational audit firm KPMG, the minister said Pakistan and Bangladesh currently have the highest corporate taxes in South Asia.
"Neighboring India has a corporate tax rate of 30%, Sri Lanka has 28% and Afghanistan has 20% corporate tax rate.
"Among the competing countries, Vietnam, Myanmar, Malaysia, Indonesia and Singapore respectively have 20%, 25%, 24%, 25% and 17% corporate tax rates.
Addressing the NBR, Kamal said, "You find out how much tax the surrounding countries collect. You can set a rate comparing their rates. If the tax rate is reduced, the amount of collected tax will increase."
Observing that if the tax rate is reduced, the tax collection should be increased through expanding the tax net and digitalisation, he said, "Our tax-to-GDP ratio is lower than other countries. This must be changed. For this, we have to digitalise the system. If this happens, tax collection will increase."
The finance minister criticised the practice of conducting campaigns at the field level without automating the tax collection procedure.
"We promised automation, but nothing happened. This is too much. I would like to request NBR to pay attention to this. The people of the country want to pay taxes; but we cannot collect it because there is no automation," he added.
At the event, crests were handed over to 10 national level taxpayer individuals and organisations who received tax cards.
Among them, Grameenphone CEO Yasir Ajman, MD of British American Tobacco Shehzad Munim, Standard Chartered Bank CFO Abdul Quader Yoardar, MD of Unilever Bangladesh Kedar Lele, and MD of Akij Group Sheikh Bashir Uddin received crests from organisation level.
At the individual level, former ministers Syed Abul Hossain, Rubaiyat Farzana Hossain, Hosne Ara Hossain, Laila Hossain and Mohammad Kaus Mia received the award.
Accepting the award, Syed Abul Hossain said, "The tax money we pay stays in the country. It is used for the development of the country. Tax money comes back to us in one way or another."
Sheikh Bashir Uddin said, "It is good to get such honour. We want a fair tax system."
NBR Chairman Abu Hena Rahmatul Munim, who presided over the programme, said, "We are working to increase the number of taxpayers. We are already working on data verification. I am collecting information from various secondary sources including BRTA and city corporations."
State Minister for Public Administration Farhad Hossain was present on the occasion as a special guest.
10 individuals, organisations in Ctg received tax cards
The Income Tax Department issued tax cards to five individuals and five organisations in Chattogram under various categories through a ceremony in the port city yesterday as a recognition of their excellent contribution to the national exchequer.
In greater Chattogram, tax cards were issued to the Dainik Azadi Editor MA Malek in the journalist category and BSRM Chairman Ali Hossain Akbar Ali in the senior citizen category.
Others who received tax cards are Sukarno Ghosh in the differently-abled category, Mohammad Kamal in the business category, Meghna Petroleum Limited and Padma Oil Company in the energy sector, Youngone Limited in the Chattogram EPZ and Universal Jeans Limited in the ready-made garment sector and SN Corporation and Sahara Enterprise in farm category.
The Income Tax Department also honoured 40 best taxpayers from Chattogram, Cox's Bazar, Rangamati, Khagrachhari and Bandarban. They were selected in four categories from among the taxpayers under the four tax zones of the division.
Commissioner (Appeal) Helal Uddin Sikder was the chief guest at the function presided over by Commissioner (Tax) Syed Mohammad Abu Daud.
Customs and VAT Appeal Commissioner Dr Golam Md Munir, Tax Commissioners GM Abul Kalam Kaikobad, Dr Mutasim Billah Farooqi, Md Reazul Islam, President of Tax Lawyers Association Enayet Hossain and the Dainik Azadi Editor MA Malek spoke on the occasion among others.