Two leading trade bodies on Wednesday demanded a gradual reduction in corporate income tax rates to attract more domestic and foreign direct investments.
The Dhaka Chamber of Commerce and Industry and the Bangladesh Chamber of Industries made the demand while placing their respective budget proposals for the fiscal year 2021-2022 at a pre-budget discussion with the National Board of Revenue held at its headquarters in Dhaka.
The DCCI proposed reducing corporate tax for listed and non-listed companies at a progressive rate by 2.5 per cent each year in the next three fiscal years.
The corporate tax rate should be lowered to 25 per cent for non-listed companies and 17.5 per cent for listed companies by FY2024 from existing 32.5 per cent in the next three years, it said.
The DCCI also proposed imposing 10 per cent tax on income of corporate dividend instead of current 20 per cent.
The NBR should also offer tax benefit to those companies which would invest 5 per cent of its taxable income on research and development, it said.
The leading trade body also recommended a complete automation of the tax administration to bring all taxable people under the tax net.
It also demanded an upward revision of annual turnover limit for imposing turnover VAT to Tk 4 crore from current Tk 3 crore and imposition of turnover tax based on products’ value-addition or profit ratio.
DCCI president Rizwan Rahman said that a reduction in corporate income tax would boost local and foreign investments.
He said that the revenue board should consider the proposals to revive post-COVID business confidence, ensure an easy and business-friendly tax structure, encourage industrialisation and facilitate investment-friendly environment.
The BCI demanded a reduction in corporate income tax rate to 20 per cent for listed companies from current 25 per cent and sought tax holiday facility for cottage, micro and small industries for three years to facilitate the sectors.
BCI president Anwar-ul-Alam Chowdhury Parvez said that tax rate for non-listed companies should not be over 25 per cent.
The tax-free income limit for individual taxpayers should also be raised to Tk 4 lakh from current Tk 3.5 lakh, he said.
He also demanded increasing the annual turnover limit for imposing turnover tax to Tk 10 crore from current Tk 3 crore and reducing turnover tax rate to 3 per cent from 4 per cent.
The NBR should also regularly update the database of prices of imported goods to prevent misdiclaration and duty evasion, he said.
At a separate meeting, the Bangladesh Private Medical College Association demanded withdrawal of 15 per cent income tax on private medical colleges.
The association also demanded withdrawal of duties and taxes on import of surgical hand gloves and equipment imported by the private hospitals.
BPMCA president MA Mubin Khan placed the proposals at the meeting.
NBR chairman Abu Hena Md Rahmatul Muneem, however, said that there should be no problem of paying taxes if a non-profit entity makes profits.
He, however, said that the NBR might consider offering tax waiver for hospitals to be set up in rural areas.
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