FBCCI seeks revision of budget proposal on income tax, VAT
The apex trade body has once again demanded revision of the finance minister's budget proposal on income tax, customs duty and value-added tax for the next fiscal year.
Subsequently, the Federation of Bangladesh Chambers of Commerce and Industry has submitted a set of recommendations to the National Board of Revenue that it believes are necessary to accelerate economic development through industrialisation and investment.
The FBCCI, as part of the major recommendations, called for reinstating the 0.6 percent tax at source on export, reducing the corporate tax to 10 percent from the proposed 20 percent for garment sector and increasing the tax-free limit to Tk 3 lakh on individual income.
It also urged the government to increase the limit of turnover tax from Tk 80 lakh to Tk 5 crore and re-fix the turnover tax at 0.5 percent instead of 3 percent.
The FBCCI asked for the full implementation of the VAT law for small and medium enterprises based on their business performance.
It also demanded withdrawal of advance income tax on import of capital machinery, basic raw materials, intermediary goods and other ingredients used for industrial purposes, and continuation of VAT-free facility for loaves, buns, slippers, cakes and biscuits.
Also, a leading chamber yesterday suggested the government should widen the tax net rather than putting the burden of extra tax on the existing taxpayers for fulfilling the collection target.
The Dhaka Chamber of Commerce and Industry in a statement proposed reduction of the corporate tax rate within 25 percent to 35 percent by formalising 70 percent of informal businesses across the country.
The DCCI called for reducing the means of undisclosed money and rationalisation of the rate of tax deducted at source and double taxation.
The trade body suggested the government complete automation of NBR services and expansion of tax collection wings across districts and upazilas.
In the proposed budget for fiscal 2016-17, a large target has been set for revenue collection.
The target of revenue collection is almost 23 percent more than this fiscal year's and 12.5 percent of the gross domestic product. The proposed budget has not outlined potential sources of revenue to back up the additional revenue collection target, the DCCI said.
It was evident that both non-development and development expenditure target of fiscal 2015-16 remained incomplete due to limited revenue collection bases, which triggered spill-over of burden on regular taxpayers.
However, in order to enrich the government exchequer and meet incremental expenditure budget, the internal resource planning, NBR Tax, and non-NBR revenue sources can be redesigned and tuned to ambitious revenue collection.