BCI demands 5-year tax holiday for small businesses
The Bangladesh Chamber of Industries (BCI) yesterday demanded a five-year tax holiday for cottage, micro and small and medium enterprises (CMSMEs) beginning from fiscal year 2024-25 in order to foster their growth.
Alongside that, the body also proposed a value-added tax (VAT) exemption for all kinds of utilities of small entrepreneurs.
"Almost 45 percent of micro and small entrepreneurs have shut down their businesses in the past two years," BCI President Anwar-Ul Alam Chowdhury said during a pre-budget discussion with National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem.
He placed the budget recommendations yesterday on behalf of the chamber at a meeting at the NBR headquarters in Dhaka.
The chamber recommended forming a special fund for young entrepreneurs to encourage them.
Chowdhury also proposed an unconditional reduction of the corporate income tax (CIT) by 2.5 percentage points. Currently, the CIT is 22.5 percent for listed companies and 27.5 percent for non-listed companies.
"The CIT in Bangladesh is still higher compared to nearby countries. If the CIT is reduced, it will encourage local businesses," said Chowdhury.
The chamber also proposed to raise the personal income tax threshold to Tk 5 lakh from the existing Tk 3.5 lakh and reschedule the tax rate taking into account elevated inflation and rising cost of living.
In the industrial sector, the upper ceiling for annual taxable turnover should be raised to Tk 4 crore from Tk 3 crore considering inflation and higher production costs, said the chamber.
MA Razzak Khan Raj, chairman of Minister Group, pointed out delays in customs clearance.
"We have to wait more than 15-20 days to get the laboratory test results. They charge an additional fee from importers. It should be much easier," he added.
However, Muneem said the NBR was not responsible for delays in customs.
"Only 7 to 8 percent of the customs delay is due to NBR activities," he said, pointing to a study by the NBR. "It happens in most cases for other reasons, including C&F agents and others."
At another pre-budget meeting, the Bangladesh Association of Pharmaceutical Industries proposed to increase the promotional expenditure limit for pharmaceutical companies from 0.50 percent of turnover to 5 percent.
The organisation also urged the NBR to change the filing of tax return at source to a six-month basis instead of monthly.
The Bangladesh Hygiene Products Manufacturing Association demanded that the VAT exemption on the import of raw materials for sanitary napkins and diapers be extended until 2027.
The LPG Auto Gas Station and Conversion Workshop Owners Association Bangladesh urged the NBR to provide the LPG Autogas sector with a tax holiday.
Another trade body, the Bangladesh Tiles Dealers and Importers Association, demanded to withdraw the supplementary duty in the import stage for ceramic tiles and sanitary products.
The NBR chairman said they would examine the proposals carefully.