MCCI for raising tax rebate investment limit

The Metropolitan Chamber of Commerce and Industry yesterday urged the government to raise the investment limit for individuals to 30 percent of yearly income to get higher tax rebate.

“This will boost investment and reduce inflation. The capital market will also benefit from the hike,” said Adeeb H Khan of the tariff and taxation sub-committee of MCCI. He was presenting tax related proposals for fiscal 2017-18 at the National Board of Revenue.

Currently, taxpayers who have up to Tk 10 lakh in yearly income can invest 25 percent of it and get 15 percent tax rebate.

However, the tax rebate benefit reduces gradually for those who earn above Tk 10 lakh a year.

Presently, depending on the level of income and the amount of investments, the tax discount will be applicable in three slabs -- 10 percent, 12 percent and 15 percent.

The revenue authority began pre-budget discussions with businesses and other stakeholders in the run up to framing the budget proposals for next fiscal year. Bangladesh Chamber of Industries (BCI) also submitted its budget proposal yesterday.

MCCI also demanded increasing the limit of wealth surcharges and waiving the surcharge for those who have up to Tk 5 crore in net wealth.

At present, people who have up to Tk 2.25 crore in net wealth are waived from the surcharge.

“This chamber, in principal, has been opposing the surcharge. The existing rate of surcharge is completely inhuman,” said MCCI, urging for a reduction in the rate of surcharge.

The trade body also suggested reducing the import duty on basic raw materials and intermediate goods, so that the domestic industries become more competitive.

It also wants authorities to abolish the scope of discretionary powers of the tax authorities.

The MCCI, citing past experience, said additional taxes were imposed to make up the gap of revenue collection shortfall.

“It is like punishing compliant taxpayers like us,” said Golam Mainuddin, vice president of MCCI, at the programme.

In its budget proposal, BCI demanded raising the tax free income limit for individual taxpayers to Tk 3.5 lakh from Tk 2.5 lakh a year at present.

It urged the government to raise the surcharge-free ceiling on net wealth to Tk 5 crore from fiscal 2017-18.

The chamber also appealed the revenue administration to withdraw the advance income tax and advance trade vat on capital machinery and basic raw materials on imports by registered producers.

BCI asked to raise the upper limit on turnover tax to Tk 5 crore a year from Tk 80 lakh a year at present. It also demanded equal treatment and tax incentives for both local and foreign investors.

In addition, the BCI appealed to the government to review the avoidance of double taxation treaties signed with various countries earlier.

Local entrepreneurs face discrimination in many cases, said BCI President Mostafa Azad Chowdhury.

He said businesses are anxious that they would have to face additional taxes to finance the huge budget for next fiscal year.

In response, NBR Chairman Md Nojibur Rahman said the tax administration has taken steps to expand the tax net.

“We will give importance to women's empowerment in budget framing. We will frame an investment and people friendly budget.”

Rahman also said good and compliant taxpayers would be nurtured. A forum with large taxpayers will be formed to address their concerns and issues, he added.

M Anis Ud Dowla, chairman of ACI Group, demanded the NBR to refund excess payments to taxpayers against advance income tax at source.

Sometimes, the total amount of tax at source exceeds the total amount of tax payable, he said.

But taxmen are reluctant to refund, he added.

Instead, they ask taxpayers to carry forward the excess amount to adjust with next year's payable tax, he said.