Dhaka chamber for 7pc VAT, cuts in corporate tax rates

Dhaka Chamber of Commerce & Industry (DCCI) yesterday called for a 7 percent valued added tax instead of the 15 percent planned for the upcoming fiscal year and a cut in corporate taxes.

The chamber made the proposals as it submitted 49 recommendations to the National Board of Revenue (NBR) for the government's consideration.

DCCI President Abul Kasem Khan presented the chamber's budget recommendations to NBR Chairman Md Nojibur Rahman at the latter's office.

Khan said the VAT rate should be 7 percent instead of the 15 percent the government is planning to implement from July 1 this year.

He proposed Tk 350,000 as tax-free income limit for individuals and Tk 475,000 for war-maimed freedom fighters, according to a statement from the chamber. 

The DCCI proposed keeping research and development activities free from tax.

Khan suggested reduction of corporate tax rate for merchant banks to 35 percent from the existing 37.5 percent. The corporate tax rate should be 30 percent for non-listed companies, 22.5 percent for listed companies and 32.5 percent for brokerage operations, he said.  The DCCI chief proposed tax exemption for firms' profits which are re-invested. For small traders, the DCCI called for 'no VAT' for turnover up to Tk 50 lakh and 3 percent VAT for turnover above Tk 50 lakh but below Tk 1.20 crore.

Khan said VAT exemption on internet use will help realise the vision of Digital Bangladesh.

The DCCI requested the government to formulate a duty structure for at least three years to five years as frequent changes in rates sometimes hamper the momentum of industrialisation.

NBR Chairman Rahman said the government is committed to making a business and industry-friendly budget for 2017-18. The NBR would organise workshops on tax issues to raise awareness.

Rahman underscored the importance of reducing the gap between tax officials and businessmen. The NBR will initiate internship programme for tax officials at different trade bodies, according to the DCCI.

The NBR chief thanked the chamber as all of its members are tax compliant.

DCCI Senior Vice President Kamrul Islam called for easing online tax payment system. 

DCCI Vice President Hossain A Sikder, directors Asif A Chowdhury, Akber Hakim, Imran Ahmed, K Atique-e-Rabbani, KMN Manjurul Hoque, Mamun Akbar, Md Alauddin Malik and Secretary General AHM Rezaul Kabir were present at the pre-budget discussion.