The government investment promotion agencies on Tuesday demanded a reduction in corporate income tax rate and other taxes to facilitate domestic and foreign direct investments in the country.
At a pre-budget discussion with the National Board of Revenue, Bangladesh Economic Zone Authority, Bangladesh Investment Development Authority, Bangladesh Export Processing Zone Authority and Bangladesh Hi-Tech Park Authority made the demand.
BIDA sought an extension of the facility of legalisation of untaxed money by paying only 10 per cent tax to all areas in the country to attract more investments.
Currently, the benefit is given only for investment in economic zones and hi-tech parks.
BIDA said that the widening of the benefit across the country would help generate employment.
At the meeting, BEZA demanded reduction in corporate income tax by 10 per cent to 22.5 per cent from current 32.5 per cent while BIDA requested the NBR to set the tax rate at 25 per cent.
Both the entities said that the corporate tax rate in the country was higher than the competing countries like Vietnam, Thailand, China, India and Malaysia and difference of the rate was creating obstacles to attracting FDI to the country.
BIDA also demanded VAT exemption to locally produced capital machinery and spare parts, suspension of the provision of minimum tax on firms irrespective of their profits and losses for next three years considering the fallout of the COVID-19 outbreak.
It also recommended elimination of section 30B of the income tax ordinance related to compliance with tax deduction at source.
BIDA also proposed introduction of joint audit for income tax, value-added tax and customs duty instead of existing separate audit system and introduction of electronic system for deducting TDS and source VAT.
BEZA in its proposal requested the revenue board not to deduct AIT on import by investors at BEZA as investors enjoy tax waiver on their income.
It also sought long-term tax benefit for large volume of investment in the economic zones instead of existing similar tax treatment irrespective of the volume of investment.
It also requested the NBR to increase the tax-free annual turnover to Tk 3 crore for small and medium enterprises from current Tk 50 lakh.
BEZA demanded either withdrawal of or reduction in VAT on lease money the entity received from investors at the economic zones.
BEPZA sought similarity in tax exemption on income and duty benefit for vehicle import for investors at BEZA and BEPZA.
It also recommended a special tax holiday for diversified and non-traditional products and industries located in remote and underdeveloped areas.
The BHTPA sought tax exemption facility for additional time for investors in the parks and relaxation of conditions for importing vehicles under duty-free benefits.
Business Initiative Leading Development, a public-private initiative, demanded a reduction in corporate income tax to 30 per cent from 32.5 per cent, additional 1 per cent waiver for certain level of employment generation and tax waiver on 10 per cent of individual’s expenditure.
It also demanded an end to harassment in audit process and stop unnecessary audits and widening of bonded warehouse benefits for all types of exporters.
BHTPA managing director Hosne Ara Begum, BUILD chairperson Abul Kasem Khan, BEZA executive member Abdul Azim Chowdhury, BIDA executive member Mohsina Yasmin and director Md Ariful Haque, BEPZA member Md Mahmudul Hossain Khan, among others, spoke at the meeting presided over by NBR chairman Abu Hena Md Rahmatul Muneem.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Tax