Federation of Bangladesh Chambers of Commerce and Industry demands that the government raise the tax-free income tax ceiling for individual taxpayers to Tk 3.5 lakh and restructure the corporate income tax rates in the national budget for the upcoming fiscal year (2019-2020).
The apex trade body of the country also seeks an impact assessment of new VAT and Supplementary Duty Act-2012, which is scheduled to come into force from July this year, on food inflation and non-food inflation.
NBR is yet to carry out such assessment despite repeated requests from the trade body.
The trade body will place the proposals along with other demands before finance minister AHM Mustafa Kamal today at the 40th budget consultative committee meeting arranged jointed by National Board of Revenue and FBCCI.
FBCCI will also seek clarity on various issues including value-added tax rates, rebate and VAT-free turnover limit under the new VAT law.
NBR should also keep a number of existing provisions including package VAT, tariff value, truncated base value and VAT exempted list of goods in the new VAT regime.
According to the FBCCI proposals, tax-free income ceiling should be raised to Tk 3.5 lakh from the current Tk 2.5 lakh, which was set three years ago, considering high inflation over the years.
FBCCI demands a reduction in corporate tax by 2.5 percentage points to 22.5 per cent for publicly traded companies, to 35 per cent for merchant banks, and to 32.5 per cent for non-manufacturing trading companies and by 5 percentage points to 30 per cent for VAT registered manufacturing companies.
It also demands increasing the corporate income tax rate to 40 per cent from the current 37.5 per cent for banks, insurance companies and financial institutions which got approval in 2013.
FBCCI also recommends an increase in tax on repatriation-worthy dividend of foreign companies which are not listed with the country’s capital market.
It said that as per a decision taken at the March 31 meeting with the finance minister, there would be four VAT rates — 5 per cent, 7.5 per cent, 10 per cent and 15 per cent — in the new law. The decision was praiseworthy, it said.
But, turnover VAT should be lowered to 3 per cent from the proposed 4 per cent.
FBCCI demands a reduction in advance income tax at import stage to 3 per cent from the current 5 per cent, and withdrawal of the tax on import of raw materials.
NBR should set minimum income tax at Tk 4,000 merging the existing three rates — Tk 5,000, Tk 4,000 and Tk 3,000 — based on area of residence of a taxpayer, it said.
The limit on wealth surcharge-free net asset should also be raised to Tk 3 crore from the current Tk 2.25 crore.
NBR should reduce the customs duty on import of raw materials which are not available in the country to 3 per cent from the current 5 per cent while the duty should not be above 1 per cent for basic raw materials, it said.
Advance trade VAT and AIT should be waived on import of basic raw materials, it said.
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