Finance minister Abul Maal Abdul Muhith on Tuesday suggested the business community for enhancing their capacity to sustain in businesses amid new crises to be arisen in coming years due to massive reduction of supplementary duty in import and implementation of new value-added tax.
He also said that the government would also introduce market-based taxation system for tobacco sector from the next fiscal year under which the market would determine the prices of tobacco products instead of existing NBR-controlled one.
He also hinted that the government might backtrack from its planned imposition of property tax in the next fiscal year of 2015-16.
Muhith made these comments at the 36th consultative committee meeting of the National Board of Revenue and the Federation of Bangladesh Chamber of Commerce and Industry held in Dhaka.
At the meeting, the FBCCI president Kazi Akram Uddin Ahmed placed a total of 587 proposals related to income tax, customs duty and VAT for consideration in the coming budget.
The proposals include increasing tax-free income limit for individual taxpayers, reduction of corporate tax, measures to give protection to local industry, ensure investment and business-friendly environment, and special tax benefits for businesses that incurred losses in political unrest in last few months.
The FBCCI also demanded for restructuring the existing customs duty rates and setting to 1 per cent for capital machinery and basic raw materials, 3 per cent for intermediate raw materials not produced in the country, 10 per cent for raw materials produced in the country and for essential consumer goods and 25 per cent for finished and luxury products.
It also urged the government to maintain maximum 30 per cent to 40 per cent difference in duty for locally produced goods and imported goods to ensure protection to domestic industry and consumer rights.
The FBCCI also suggested the government for imposing specific duty on suspicious products to prevent duty evasion through under-invoicing.
‘Improve your capacity and competitiveness to cope with the new challenges including massive reduction of SD where local businesses would not get significant support in the form of SD,’ Muhith said while speaking at the meeting.
The government usually imposes SD on import of many products, among others, produced in the country to provide protection to local industry.
Muhith said that the government would have to reduce revenue earnings from customs duties including SD in a bid to create a unique international trade system.
‘In continuation of last fiscal year, the government will reduce SD further and the businesses will have to tolerate the burden,’ he said.
He also asked the traders to be prepared for the new VAT regime to be implemented in the next one year.
Regarding tobacco taxation, Muhith said that currently the government fixed the tobacco tax through negotiation with the sector people and set the different slabs for prices and quality of cigarettes which was not the government’s duty.
Like other countries, market will determine the prices of cigarettes, he said.
On imposition of property tax, he said that the government would re-think its plan to introduce the tax as neighboring country India recently scraped the system and the NBR was working on exploring the reason for which India withdrew the system.
At the meeting, state minister for finance and planning MA Mannan said that the VAT rate would remain below 15 per cent in the country.
He also advised the businesses for coming forward with mobile and automobile assembling industry in the country.
NBR chairman Md Nojibur Rahman said the government would not increase the tax-burden rather it would go for tax-net expansion in future.
The FBCCI proposals included 142 proposals related to income tax, 318 related to customs duty and 127 related to VAT.
It demanded for inclusion of proposals including introduction of multiple VAT rates made by the NBR-FBCCI committee in the new VAT act before implementation of the act.
It also sought withdrawal of SD on domestic products at manufacturing stage to make domestic industry competitive.
The FBCCI also suggested for raising tax-free income limit for individuals to Tk 2.75 lakh from the existing Tk 2.2 lakh.
Industries ministry secretary Mosharraf Hossain Bhuiyan, FBCCI first vice-president Monowara Hakim Ali, vice-president Helal Uddin, Bangladesh Garment Manufacturers and Exporters Association president Atiqul Islam, Exporters Association of Bangladesh president Abdus Salam Murshedy, India-Bangladesh Chamber of Commerce and Industry former president Abdul Matlub Ahmed, Chittagong Chamber of Commerce and Industry vice-president Mahbub Chowdhury, Bangladesh Furniture Manufacturers and Exporters Association president KM Akhtaruzzaman, among others, spoke at the meeting.
Source: New Age
