The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) yesterday said the opportunity to legalise undisclosed money could be offered in the productive sector for a specific period, not for indefinitely.
“Our views are clear. If there is any undisclosed money, the government can give them a chance to invest in the productive sectors for a specific period. However, it should not be allowed forever,” said FBCCI President Md Jashim Uddin. He made the remarks at a media briefing at the FBCCI Icon Building while sharing the apex trade body’s views on the proposed budget.
Finance Minister AHM Mustafa Kamal unveiled the budget for the fiscal year of 2021-22 on Thursday.
He, however, did not mention whether the government was going to continue the special provision on black money whitening, which allows individuals to legalise assets without facing any question about the source of funds from any authority.
The current provision to legalise untaxed money on payment of 10 per cent tax on the disclosed amount expires on June 30.
The special treatment drew flak from various quarters as it discourages compliant taxpayers and encourages corruption.
However, people with undisclosed wealth will be able to invest their income to buy real estate and land by paying tax. The scope to invest the untaxed money in economic zones and hi-tech parks will also continue in the next fiscal year.
Jashim said people who paid taxes regularly would feel discouraged if the government extended the opportunity to invest undisclosed money for a long time.
Budget implementation has long faced challenges in the areas of governance, monitoring, investment, revenue collection, and ensuring business-friendly tax administration, the FBCCI said.
“Increasing administrative and executive efficiency, transparency and accountability in these areas and upgrading monitoring quality were crucial to overcoming the challenges.”
The federation expressed dissatisfaction over the hike in advance income tax (AIT) from 5 per cent to as much as 20 per cent for businesses. The increase might bring businesses to a standstill, it said.
As business operating expenses rose due to the AIT, the FBCCI had earlier placed a proposal demanding its withdrawal.
In the proposed budget, the rate of business turnover tax for individual taxpayers has been reduced from 0.50 per cent to 0.25 per cent. The FBCCI urged the government to make the rate effective for all businesses.
The advance tax on imports was cut from 4 per cent to 3 per cent even though the FBCCI had earlier recommended that the tax be withdrawn.
The federation urged the government to meet the budget deficit by borrowing funds from foreign sources and issuing special local bonds instead of taking it from local banks.
It called for withdrawing the 15 per cent tax imposed on private universities, medical, dental and engineering colleges, citing the education system was greatly affected by the pandemic.
The federation appreciated the government moves taken to attract investment and protect local industries. It applauded the focus on skills development and the tax cuts for companies where 10 per cent of the employees belonging to the third gender.
Metropolitan Chamber of Commerce and Industry President Nihad Kabir, Dhaka Chamber of Commerce and Industry President Rizwan Rahman, and Bangladesh Textiles Mills Association President Mohammad Ali Khokon were present during the media briefing.