FICCI for adopting MFS, agent banking as payment mode

The foreign investors' chamber yesterday urged the revenue authority to formalise the adoption of mobile financial service (MFS) and agent banking as a mode of collection or payment in all tax laws.

They called for consultation with the Bangladesh Bank to reduce transaction costs to encourage businesses to adopt MFS and agent banking.

"This will improve convenience as well as transparency," said Naser Ezaz Bijoy, president of the Foreign Investors' Chamber of Commerce and Industry (FICCI), at a pre-budget discussion organised by the National Board of Revenue (NBR).

Snehasish Barua, partner of Snehasish Mahmud & Co, presented the FICCI's recommendations at the programme at the NBR headquarters.

Naser said technological transformation helped a large number of people use smartphones and internet.

Besides, most of the people are very much used to MFS and agent banking, which has taken banking facilities in the rural areas, he said, adding that money transferred through MFS rose 40.5 per cent year-on-year to Tk 62,993 crore in June 2021.

However, the benefits have been confined to individuals only.

"This is the prime time to encourage businesses to use the formal channels to carry out transactions," Naser said.

The FICCI said the step will result in an increased formal transaction, increased traceability and an expanded tax net.

NBR Chairman Abu Hena Md Rahmatul Muneem said it would be tough to bring people under formal channels who are habituated with cash transactions.

Naser said the FICCI promotes tax compliance.

"We are cognizant about the challenge of striking the right balance between the paces of reform and maintaining positive business sentiment to meet the immediate increased revenue collection requirement to support fast-paced economic development."

The FICCI said non-resident digital intermediation services providers are not paying corporate tax even though their income is generated in or from Bangladesh is taxable here.

As the NBR is exploring to collect tax from digital service providers on revenues earned from Bangladesh, the FICCI offered support to the NBR by sharing the international practices for tax authorities on collecting tax from the digital service providers.

The chamber also recommended the NBR reconcile taxpayers' declaration of bank accounts with the database of the central bank to ensure the completeness of reporting on tax returns by a taxpayer.

This reconciliation process can be automated, Naser said. The FICCI demanded rationalisation of tax deducted at source.