Reduce corporate tax, ease payment processes

The Business Initiative Leading Development (BUILD) has urged the tax authorities to cut corporate tax and simplify the tax payment procedures to help the economy recover from the pandemic losses.

There is no alternative to increasing the country's present tax GDP ratio, the research-based dialogue and advocacy platform believes.

The existing ratio of direct and indirect tax in Bangladesh is around 35:65, which should be reversed to uphold the interest of the consumers and the productive sectors, it said.

Abul Kasem Khan, chairperson of BUILD, made the call in its budget proposals handed over to Abu Hena Md Rahmatul Muneem, chairman of the National Board of Revenue (NBR), at a programme at the NBR office in Dhaka yesterday.

The tax net should be widened and the tax rates should be lowered, the platform recommended.

The NBR should minimise the costs of administrative work and compliance, ensure procedural fairness, avoid discrepancies and discrimination, ensure transparency and work to boost taxpayers' confidence, it said.

The platform also demanded increasing reliance on ICT, especially electronic payment facilities, and take well-planned tax audit strategies to increase efficiency and reduce the risk of leakage.

Segmentation of the taxpayers is also a must now to ensure better customer service at all levels. If all kinds of taxes are added, the corporate income tax stands at around 40 to 45 per cent now, which is not realistic, it said.

The BUILD proposed considering 1 per cent of the gross revenue for research, innovation, skills development and training as tax deductible for three years.

In addition, individuals spending up to Tk 2 lakh on computer, smartphones, laptops, trainings, skills development and research for their family should be treated as tax deductibles.

Big companies are frequently audited, which causes additional spending. So to cut cost, the companies can be audited by the auditors approved by the NBR.

BUILD also sought for introducing discounted corporate income tax rate of 25 per cent for all "One Person Company" under the new tax slab.

The BUILD also referred introduction of tax card for the good taxpayers as a recognition for their compliance.

Similar bonded warehouse facilities should be extended to all types of exporters to raise competitiveness in the market, it also recommended.