Withdraw advance income tax: FBCCI
The FBCCI yesterday urged the tax administrator to withdraw advance income tax (AIT) on import of industrial raw materials, saying that collection of advance tax goes against the fundamental principle of income tax law.
The apex trade body also objected to collection of tax based on what taxmen deem to be the gross profit of a firm and to reports of the National Board of Revenue (NBR) mulling over the formation of a specialised force to ensure security of taxmen during drives against tax and duty evaders.
“We have to generate revenue. But it has to be free from harassment,” said Md Shafiul Islam Mohiuddin, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
“We will cooperate with you (taxmen) for your enforcement of law. But let the business community and people not feel (uneasy of) things like arms and force. We want mutual respect,” he said.
His comments came at a meeting between businesses and the high-ups of NBR at the FBCCI office on a new income tax law as the existing income tax ordinance is overwhelmed with a lot of changes.
NBR Chairman Md Nojibur Rahman said the law would be framed with the objective of ensuring a harassment free environment for tax payment.
He also said the NBR was not thinking of forming any specialised force.
“On many occasions, taxmen have to work and we want to be sure they do not face any problem. So we give importance to ensuring their safety.”
“We want to see what steps would allow our colleagues to work safely,” he said citing that the NBR organised a seminar over this.
At yesterday's meeting businesspeople demanded curbing taxmen's discretionary powers, automaton of the tax system, reducing the number of self assessment-based tax returns being audited, withdrawal of minimum and turnover tax and establishment of a system on sales and determination of gross profit.
The FBCCI said assumptions made by tax official to determine gross profits was a big problem for businesses.
Taxmen at the field level do not accept the formula for determination of gross profits which was devised by a joint committee of NBR and the FBCCI, it said.
The apex trade body suggested that the NBR include a provision in the law to accept sales and gross profit accounts audited by chartered accountancy firms acknowledged by the Financial Reporting Council.
It also recommended for establishing an independent tax appellate tribunal under the law ministry.
Citing that 5 percent AIT is collected on import of industrial raw materials, the FBCCI said such provision should not remain if the government wants to frame a business-friendly tax law.
The draft of the law should be framed by abolishing the tradition of this type of AIT collection to help reduce business costs, it said.
FBCCI President Mohiuddin said profits and losses are the results of a business and one takes risks to make profits although losses may be incurred in the end.
He said a provision exists on collection tax refunds. However, a lot of time and money is wasted in the process to get the refund. And it becomes painful for those who incur losses after paying AIT, he said.
“We hope you will consider the matter,” he said.
Golam Mowla, general secretary of Moulvibazar Baboshayee Samity, a wholesale hub for essential commodities such as edible oil and sugar in Old Dhaka, said taxmen claim tax from many taxpayers assuming gross profits to be 15 percent.
“We want to pay tax based on our actual profits,” he said.
FBCCI Director Md Abu Naser demanded of an income tax law that anyone could easily understand.
Kamrul Islam, senior vice president of the Dhaka Chamber of Commerce and Industry (DCCI), recommended curtailing audit of tax returns submitted by taxpayers.
He suggested for auditing 1 percent of tax returns based on random sampling. This will increase the tax net, he added.
Iqbal Hasan Jewel, a businessman, said the tax file he submitted under universal self assessment was audited eight times.
Abdus Salam, a DCCI member, said business was sluggish and the revenue authority's move to frame new laws raised tension of businesses.
“You ask for tax. But how could we pay tax at a high rate when we can make 4-5 percent profit,” he questioned.
FBCCI Director Abu Motaleb demanded that the NBR frame a law prioritising FBCCI's suggestions.
NBR Chairman Rahman said the NBR for the first time this year would recognise taxpaying families with a Tax Hero award.
The tax authority also plans to issue stickers among taxpayers certifying tax payment to encourage compliance, he said.
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