DCCI wants corporate tax cut

The Dhaka Chamber of Commerce & Industry (DCCI) yesterday urged the revenue administration to cut the corporate tax for listed and non-listed companies by 2.5 per cent in the next fiscal year.

It demanded a 5 per cent and 7 per cent reduction in the corporate tax rate in the fiscal years of 2022-23 and 2023-24, respectively.

"If the government cuts the corporate tax rate, it will boost local and foreign investment," said Rizwan Rahman, president of the DCCI, in a press release. 

The businessman placed the chamber's budget recommendations for the next fiscal year to National Board of Revenue Chairman Abu Hena Md Rahmatul Muneem at the latter's office in the capital yesterday.

The proposals were aimed at reviving business confidence in the post-pandemic period, building a business-friendly tax structure, widening tax and VAT net, ensuring export diversification, encouraging industrialisation, and facilitating an investment-friendly environment.

The chamber called for halving the tax on the income of corporate dividend to 10 per cent from 20 per cent now.

Besides, if a company invests 5 per cent of its taxable income on research and development, this investment should be tax-free, Rahman said.

In Bangladesh, only 24 lakh taxpayers submit returns out of 50 lakh registered taxpayers. This prompted the chamber to propose to automate the revenue structure fully.

The DCCI demanded a withdrawal of value-added tax (VAT) at source in the service sector. It urged the NBR to impose the turnover tax based on the value-addition of products or profit for the businesses that are out of VAT net. 

The DCCI said an excise duty had been imposed twice in case of getting a loan from banks. "The system should be withdrawn."

The chamber recommended tax exemption on the investment in greenfield infrastructure projects at least for the next five years.

With greenfield investing, a company builds its own, brand new facilities from the ground up.

In the leather industry, the corporate tax for listed companies is 25 per cent, and for non-listed companies 32.5 per cent. In order to diversify exports, the chamber proposed to reduce the rate and allow them the opportunity to renew the bond licence for three years like that enjoyed by the garment industry.

The DCCI called for a tax exemption for local manufacturers of machinery and accessories used for electric vehicle charging stations.

Muneem urged industries and businesses to be more compliant, which will boost confidence between the businesses and the revenue administration.