The Daily Star
Businesses yesterday called for structural reforms in the tax system to reduce the cost of doing business, ease compliance burdens, and improve investment competitiveness.
In this regard, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) placed a set of proposals for the upcoming national budget before the National Board of Revenue (NBR) at a pre-budget discussion held in Dhaka.
FBCCI Administrator Md Abdur Rahim Khan presented the major proposals at the discussion.
The apex trade body called for reducing the minimum tax from 1 percent to 0.25 percent on annual gross turnover, with a long-term plan to phase it out. It said the current rate forces firms to pay tax even in loss-making periods amid high inflation, elevated interest rates, dollar shortages, and rising input costs.
The FBCCI also proposed zero minimum tax for businesses operating at a loss with zero or negative taxable income based on audited accounts, newly established firms for the first three years, and businesses affected by natural disasters, epidemics, or government-declared economic crises.
The trade body termed the turnover-based minimum tax system unfair, saying it undermines equity in taxation, and urged a more realistic framework reflecting actual business performance.
It also demanded raising the personal tax-free income threshold to Tk 500,000 and reducing corporate tax rates to ease pressure on individuals and firms.
The FBCCI called for a gradual reduction of advance income tax (AIT) at the import stage, saying it raises upfront costs and strains liquidity for import-dependent industries.
It also proposed rationalising withholding tax rates and lowering them on machinery and raw materials to support industrial expansion.
On indirect taxation, it suggested a uniform 2 percent VAT on all locally traded goods to simplify compliance and reduce disputes.
In the customs regime, the FBCCI proposed capping import duty at 1 percent on industrial machinery, spare parts, raw materials, and inputs not produced locally, and 3 percent for locally produced items.
Institutionally, it recommended establishing separate Large Taxpayer Units (LTU) and Medium Taxpayer Units (MTU) in Dhaka and Chattogram to improve tax administration.
Speaking as the chief guest, Finance Minister Amir Khosru Mahmud Chowdhury said the government is committed to ensuring a business-friendly environment and removing barriers to doing business.
Business concerns would be reflected in the upcoming budget, he assured.
Commerce Minister Khandaker Abdul Muktadir said the economy needs revitalisation through new investment and sustaining existing industries, while pointing to challenges in banking and logistics and urging specific private sector proposals.
NBR Chairman Md Abdur Rahman Khan, former FBCCI president Mir Nasir Hossain, and International Chamber of Commerce, Bangladesh (ICCB) President Mahbubur Rahman also spoke at the event.
Source: https://www.thedailystar.net/business/economy/news/fbcci-calls-tax-reforms-reduce-business-costs-4164176
