DCCI calls for tax benefits for small businesses
The Dhaka Chamber of Commerce and Industry yesterday called for package VAT to be continued for small businesses until 2021, taking into account the sector's contribution to the economy.
In Bangladesh, small and medium enterprises account for more than 30 percent of gross domestic product, 75 percent of private sector businesses, 75 percent of total employment and 80 percent of industrial employment.
The rate under the package VAT might be increased by 10 percent a year until 2021, said Hossain Khaled, the association's president, presenting the chamber's budget proposals to the National Board of Revenue at the latter's office.
Khaled recommended different package VAT rates for different types of SMEs across Bangladesh.
On the electronic cash register, the related software has to be tested before being implemented, to ensure that it is proper, he added.
“Otherwise it will be a hassle for the businesses, which will ultimately hamper revenue management.”
The chamber urged the government to widen its tax net to collect more revenue in the upcoming fiscal year.
Although the earnings of nearly three crore people have exceeded the income-tax waiver limit, only 11 lakh taxpayers pay taxes regularly, it said.
Khaled said the chamber strongly proposed widening the tax net, along with rationale to increase the tax rate, to achieve the revenue target for 2016-17.
The chamber placed 92 proposals with the NBR on income tax, value added tax, import duty, laws and regulations.
Khaled proposed raising the tax-free income ceiling to Tk 3.5 lakh from the existing Tk 2.5 lakh in the next budget, considering the growing cost of living and inflation.
The DCCI chief also demanded raising the tax exemption threshold for women and senior citizens, aged over 65 years, to Tk 4 lakh from Tk 3 lakh now.
In addition, the association proposed raising the tax exemption threshold for the physically-challenged to Tk 4.25 lakh from Tk 3.75 lakh.
The trade body suggested forming a special taskforce under the Tariff Commission with representatives from the public and private sectors, to ensure that the interest of both importers of products and local producers are protected.
It also suggested continuation of the tax rebate in equipment import to develop the energy and power sector next fiscal year.
The DCCI proposals also included reducing the corporate tax rate for merchant banks to 35 percent from 37.5 percent, reducing source tax on general purchase and sales to 2.5 percent from 5 percent, easing duty drawback method in exporting jute products and keeping port charges, demurrage and penalties at a tolerable level.
NBR Chairman Md Nojibur Rahman assured the DCCI delegation that the revenue board would consider the proposals.