A more streamlined tax collection system would help rebuild the country’s economy and push it towards its goal to become a developed nation, said Shams Mahmud, president of the Dhaka Chamber of Commerce and Industry (DCCI), yesterday.
“For that, we need to widen the tax net, online tax and VAT return submission system, simplify the return submission process and provide hassle-free service,” he said.
The DCCI chief also said registered industries should not have to pay value-added tax for land leased at the economic zones. The advance income tax imposed on the local small and medium enterprises (SMEs) that import raw materials should also be reduced, he added.
Mahmud made these comments during a virtual workshop on the ‘Finance Act 2020 and VAT & Supplementary Duty Act 2012’. Around 100 members of the DCCI and other business entities participated in the workshop.
The global economy has been significantly affected by the ongoing coronavirus pandemic, and Bangladesh has not been spared. To address the Covid-19 fallout, the national budget for fiscal 2020-21 is geared towards facilitating economic recovery.
Mahmud also informed that like previous years, the DCCI Tax Guide 2020-21 has been published.
Masud Sadiq, member for VAT Policy of the NBR, said that a simplified VAT system would improve the ease of doing business in Bangladesh.
“It is true that for a country’s development, a higher revenue target is key. But at the same time, we need a balance between the increased target, rationalised tax regime and VAT structure,” he said.
While presenting a paper on the DCCI’s proposals on the Budget 2020-21, M Shafiqul Alam, convenor of the standing committee of the DCCI on customs and VAT, said that the VAT return submission process and advance VAT refund system should be made easier.
He also urged for the development of a comprehensive online VAT return submission system.
To achieve this year’s target for revenue collection, a simplified, automated, sustainable and hassle-free tax and VAT return submission system is needed, said Snehasish Barua, a tax consultant.
The NBR has taken a good number of pro-business initiatives in this regard but at times, statutory regulatory orders made halfway through the year hamper the country’s business activities
Barua, also a partner at Snehasish Mahmud & Co., said that simplifying the rules would reduce tax evasion.
Md Alamgir Hossain, member for tax policy of the NBR, said in comparison with neighbouring countries, Bangladesh’s tax rate is not too high. However, the way it is implemented could be more rationalised.
“Therefore, if the NBR feels that the reduction of a particular tax may increase business activities, it will definitely be done,” he said, adding that he hopes an online VAT and tax return system will be fully implemented by next year.
The tax structure needs immediate reforms to expand the tax net.
There are 1,76,000 business houses registered under the Registrar of Joint Stock Companies and Firms (RJSC), of which 70,000-75,000 are TIN-holders. But only 36,000 of them submit returns, Hossain said.
DCCI Senior Vice President NKA Mobin also spoke.