• Thursday, October 02, 2014

Don't raise tax, widen the net

FBCCI stresses realising revenue through direct taxes

Star Business Report
Finance Minister AMA Muhith speaks at a pre-budget consultation meeting co-organised by the NBR and FBCCI at Sonargaon Hotel in Dhaka yesterday. Photo: Star
Finance Minister AMA Muhith speaks at a pre-budget consultation meeting co-organised by the NBR and FBCCI at Sonargaon Hotel in Dhaka yesterday. Photo: Star

The apex chamber yesterday urged the government to widen the tax net instead of raising rates in the budget for the next fiscal year.  
"If it is done, it will not put any pressure on the regular taxpayers," said Kazi Akram Uddin Ahmed, president of the Federation of Bangladesh Chambers of Commerce and Industry.
He said the upcoming budget should target realising revenue through direct taxes instead of relying on the indirect ones.
Ahmed made the demands as he presented a set of suggestions on tax, duties and value added tax at a consultation meeting of the National Board of Revenue at Sonargaon Hotel in the capital.
The consultation meeting, the FBCCI being its co-organiser, offers the businesses and chambers a last-minute chance to suggest changes to tax, VAT and duty structures before the budget is announced in June.
Ahmed said the supplementary duties at the production level in all sectors should be withdrawn to keep the local industries competitive.
The chamber also demanded zero percent tax on turnover up to Tk 1 crore and 2 percent tax on turnover up to Tk 3 crore.

The chamber proposed raising the tax-free income ceiling to Tk 2.5 lakh from Tk 2.20 lakh now for individuals, to Tk 2.75 lakh from Tk 2.50 lakh for women taxpayers, and to Tk 3.75 lakh from Tk 3 lakh for the disabled.
The high rate of corporate tax, which is discouraging investment, should be lowered gradually, it said.
The FBCCI proposed 1 percent duty on the import of capital machinery and 3 percent duty on imported intermediary inputs and raw materials to help the local industries thrive.
The duties on locally produced intermediary raw materials should be 10 percent in fiscal 2014-15, the chamber said.
It urged the government to impose 25 percent duties on the import of luxury goods.
The government should allocate Tk 300 crore for women entrepreneurs, Ahmed said.
The subsidies for the agriculture sector should be increased, as the farm sector is getting only 1 percent of gross domestic product as subsidies.
The apex chamber put forward a total of 617 proposals -- 287 are duty related, 175 income tax related and 155 VAT related, said NBR Chairman Ghulam Hussain.
Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association, said the duties on pre-fabricated building materials should be withdrawn completely to help the garment factories that are now housed in shared buildings relocate themselves to steel-made structures. He said there are now 961 factories that are housed in shared buildings, employing more than 15 lakh workers.
Jasim Uddin, vice chairman of Bengal Group of Industries, said the government should provide cash incentives to the exporters who have been affected by the US decision to cancel the Generalised System of Preferences for Bangladesh.
Syed Almas Kabir, senior vice president of Bangladesh Association of Software and Information Services, urged the government to extend tax holiday to the sector up to 2025, to help the growing industry tap its potential.
He said the e-commerce transaction should be exempted from paying VAT for three to five years to make online transaction popular.
Masud Alam Masud, chairman of Bangladesh Auto Re-rolling Mills Association, opposed the proposal to reduce import duties on billets, a key raw material for producing rods. "Our local production is enough to meet the domestic demand. If the duties are lowered, many mills will go bust," he said.
AK Azad, a former president of the FBCCI, said cash subsidies for the spinning mills should be raised to 10 percent from 7.5 percent now to help revive the sector.
Taufiq Uddin Ahmed, president of Tour Operators Association of Bangladesh, demanded a threefold rise in budgetary allocation for the tourism sector.
He demanded withdrawal of 10 percent advance income tax on the remittance income in the tourism sector.  
Bangladesh Tea Society called for imposing supplementary duties on the import of tea as the local producers are now in a tight corner due to such imports.
MR Mostak, president of Bangladesh Jamdani Manufacturers and Exporters Association, said the incentives for the sector should go up to 25 percent from 5 percent now.
Rupali Chowdhury, president of Foreign Investors' Chamber of Commerce and Industry, urged the government to avoid double taxation in the corporate sector.
The FBCCI said reducing unemployment through increasing investment, ensuring equal distribution of wealth, and earning more revenue from domestic sources would be the major challenges in the upcoming fiscal year.
The FBCCI proposed keeping the size of the annual development programme within the limit so that it can be implemented properly.
It said only 38 percent of the current ADP could be implemented in the first eight months of the current fiscal year, which was 44 percent in the previous fiscal year.
FBCCI chief Ahmed said the upcoming budget should provide a realistic plan to achieve the GDP growth target for 2014-15. "More emphasis should be put on using foreign aid for implementing the budget, which will cut the government's reliance on the banking system and enhance transparency of project execution."
AMA Muhith, finance minister, and Abdul Mannan Khan, state minister for finance and planning, also spoke.

 

Published: 12:00 am Friday, May 09, 2014

Last modified: 11:15 pm Thursday, May 08, 2014

TAGS: FBCCI National Board of Revenue Sonargaon Hotel Don't raise tax apex chamber Federation of Bangladesh Chambers of Commerce and Industry. VAT and duty structures

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