Corporate tax cuts on way

The government will cut corporate tax rates and bring in special measures for investors and exporters in the upcoming budget for the ease of doing business and encouraging investment.

“I have made commitments about reducing the corporate tax rate in various pre-budget discussions,” said Finance Minister AMA Muhith.

Muhith's comments came at a pre-budget discussion organised by the Dhaka Chamber of Commerce and Industry, Daily Samakal and Channel 24 at the Bangabandhu International Conference Centre in Dhaka yesterday.

He said he has had discussions with the National Board of Revenue about the multi-layer taxation system and a decision will be taken on the issue within the next two to three days. On the national savings certificates, he said the government's policy is to maintain the interest on the savings instruments a little higher than the interest rate on bank deposits.

“But the gap between the two has now become wide. We are going to review it after we place the budget,” he added.

The government would also give attention to the advance income tax, which is an important source for revenue, said Md Mosharraf Hossain Bhuiyan, chairman of the NBR.

The NBR will start working on adjustment of the advance income tax once the budget is placed. The exercise will be aimed at adjusting the tax and refunding genuine taxpayers, he said.

Bhuiyan also said the government would evaluate whether it would consider rubber as an agricultural product. There will be fiscal measures on cigarettes and they will be people- and revenue-friendly. 

Incentives will be given to the light engineering sector and capital machinery and raw materials imports. “We hope we will be able to provide something good to the export-oriented sectors.”

Some facilities would be extended to the mobile operators for 4G service with the view to popularising the new technology.

The automobile sector's value-addition would see some support in the upcoming budget, Bhuiyan said, adding that there would be budgetary measures for liquefied natural gas.

Muhith said while Bangladesh's banking sector has been on an aggressive lending streak, a greater damage was caused by tacit collusion among directors of various banks.

“I do not know how to control the mutual back-patting in the banking sector.”

He referred mutual back-patting to a situation where directors of banks collude to lend each other as existing rules do not allow a director to borrow more than a certain limit. 

Muhith also said it would not be right to say directors of banks would not get loans.

Golam Sarwar, editor of Daily Samakal, who moderated the discussion, urged the government to withdraw VAT on newspaper imports as the price of newspaper has doubled in the last one year.

“Now, the newspaper industry is facing a question of its survival,” he said.

DCCI President Abul Kasem Khan called for attention in areas like policy reforms, simplification of taxation system, business-friendly policies, enabling business climate, policy continuation, ease of doing business, incentives, reduction of taxes and inclusive policy planning.