The Dhaka Chamber of Commerce and Industry in its budget proposal for the next fiscal year has called upon the revenue authority to slash corporate tax.
The National Board of Revenue should bring down the corporate tax from fiscal 2020-21, 2021-22 and 2022-23 at a progressive rate of 5 per cent, 7 per cent and 10 per cent respectively, the chamber's President Shams Mahmud said.
He also requested the NBR to cut the tax rate on income of corporate dividend from 20 per cent to 10 per cent, according to a statement.
The chamber placed the budget proposals to the NBR yesterday. Md Alamgir Hossain, member for tax policy of the NBR, received the proposals on behalf of NBR chairman. NKA Mobin, senior vice president of the DCCI, was also present.
Mahmud urged the NBR to increase the limit of income tax return for individual from existing Tk 2.5 lakh to Tk 3 lakh and reduce the least tax return rate to 5 per cent which is now 10 per cent.
Besides, the DCCI president recommended implementing the fully automated and online tax return submission system to attract more taxpayers.
At present those who pay VAT return at a rate of 15 per cent can enjoy tax rebate, but Mahmud requested the NBR to allow the same facility to those who pay VAT return at a rate of 5 per cent, 7.5 per cent and 10 per cent as well.
There is no specific definition of "material" both in the VAT Act 2012 and VAT Law 2016. The definition of material should be included in these act and policy, he said.
He also suggested withdrawal of all advance tax imposed on raw materials and machineries used in the manufacturing-led industries in order to encourage export oriented manufacturing and export diversification.
Mahmud also wanted the turnover limit for small and medium entrepreneurs to be increased from existing Tk 3 crore to Tk 4 crore. Rebate-less VAT implementation may fuel inflation, he said.
"One of the basic rules of VAT calculation is to fix the VAT rate as per the ratio of value addition of the product."
The private sector should get the chance to participate in the transmission and distribution of power across the country, he said.
Special tax exemption facility on local manufacturing of sub-station machineries and other related accessories should be allowed in order to facilitate import substitute backward linkage industry in the power sector.
He finally requested the NBR to keep the effects of the coronavirus outbreak in consideration while formulating the upcoming budget to bring out the best of instrumental policies and revenue management for inclusive growth.