Finance minister Abul Maal Abdul Muhith on Sunday hinted that the government might reduce the rate of corporate income tax in the national budget for the next fiscal year (2017-2018).
‘We are mulling further rationalisation of corporate tax structure,’ he said at the 38th budget consultative meeting of the National Board of Revenue, referring to the businesses’ demand for setting the highest slab of corporate tax at 35 per cent.
The NBR and the Federation of Bangladesh Chambers of Commerce and Industry jointly arranged the meeting at the Bangabandhu International Conference Centre in Dhaka to discuss the demands and budget proposals put forward by the country’s business community for the next national budget.
Muhith said that he did not want to say anything more about the planned rationalisation of corporate tax structure as he needed further discussion with the government high-ups regarding the issue.
He said that the government gave some relief to the listed companies but for the other companies the rate remained higher (up to 45 per cent).
He also said that the corporate tax rate for the telecom sector would also be revised as the sector was now paying at the highest rate.
Muhith also favoured setting a permanent tax-free income ceiling for individual taxpayers and setting the tax rates for a period of three to five years.
‘I have planned to set a permanent tax-free income threshold like the USA and some other countries set, where the ceiling has remained effective for more than 50 years,’ he said.
He said that it would be better if the tax rate could also be set for three to five years.
‘But I don’t want to do this at this stage [the last moment of the government’s tenure] as it will need involvement of the next government,’ he said.
Regarding protection of the local industry after withdrawal of supplementary duty in the new VAT law, Muhith said that the NBR was examining the issue to find ways to protect the local industry through amending the law.
On imposing higher tax on tobacco products, he said that they were examining for the sector a tax structure that has been proposed by Policy Research Institute executive director Ahsan H Mansur.
‘But, I want to drive out bidi from the market within the next two years and want cooperation from all to achieve the target,’ he said.
At the meeting, FBCCI president Abdul Matlub Ahmed placed budget proposals related to income tax, VAT and customs duty for the FY 2017-2018.
He demanded introduction of multiple VAT rates including an increase in VAT-free annual turnover to Tk 36 lakh, imposing
turnover tax at 3 per cent on annual turnover up to Tk 1.5 lakh at production stage, 2 per cent VAT on traders particularly shopkeepers irrespective of their annual turnover and introducing VAT at reduced rates for those who will not able to enjoy credit benefit.
He also demanded implementation of a seven-point recommendations of the NBR-FBCCI joint committee regarding VAT rates and other issues of the new law, saying that a confidence crisis was created among the businessmen due to non-implementation of the recommendations.
He also suggested continuation of zero-duty benefit for the existing 312 products including yarn, perishable goods and lifesaving drugs, continuation of specific duty on 47 products including steel, iron, sugar, cement clinker and petroleum and continuation of supplementary duty on import to protect local industries.
The FBCCI also proposed to raise tax-free limit for individual taxpayers to Tk 3.25 lakh from the current Tk 2.5 lakh and to reduce the rate of corporate income tax.
NBR chairman Md Nojibur Rahman said that the revenue board would prepare a business and investment-friendly budget this year.
‘There are myths that the new law (VAT and Supplementary Duty Act-2012) will cause inflation and increase VAT burden on businesses, which are not true,’ he said adding that people should not be misguided by the myths.
FBCCI first vice-president Shafiul Islam Mohiuddin, vice-president Mahbubul Alam, former first vice-president Md Jashim Uddin, Dhaka Chamber of Commerce and Industry president Abul Kasem Khan, Association of Mobile Telecom Operators of Bangladesh secretary general TIM Nurul Kabir, Consumers Association of Bangladesh president Golam Rahman, Bangladesh Women Chamber of Commerce and Industry president Selima Ahmad, BUILD chief executive officer Ferdous Ara Begum, Bangladesh Association of Software and Information Services president Mustafa Jabbar spoke, among others, at the meeting.
Source: New Age