Bangladesh has been facing discriminatory taxation in getting access to US market, said National Board of Revenue chairman Mosharraf Hossain Bhuiyan at a luncheon organised by American Chamber of Commerce in Bangladesh on Thursday.
Claiming Bangladesh’s taxation policy equitable, Mosharraf made the observation responding to request from the AmCham president Md Nurul Islam that the government should ensure equitable taxation policy for creating level playing field thus attracting foreign direct investments in Bangladesh.
At the meeting, AmCham also proposed for increase in tax-free income limit for individuals and cut in corporate tax rate.
‘In the US market, Bangladesh unfortunately faces tax discrimination in exporting products,’ said the NBR chairman, raising question that why Bangladesh would pay 15 per cent taxes in exporting its products in US market while the Vietnam, being a country with same status like Bangladesh, were getting access in the market with 7-8 per cent taxes.
Despite barriers, Bangladesh has been maintaining good position in exporting products in US market, said Mosharraf, adding that the country’s export to America could have grown further along with increased profitability and competitiveness if the policy were equitable.
Mentioning the Bangladesh’s taxation policy equitable and justified, the NBR chairman expected that more US companies would come in Bangladesh for investments.
He, however, said some countries get benefit of double taxation avoidance agreement.
Mosharraf also assured that the country’s tax rate will remain unchanged rather will decrease in some cases.
At the meeting, Md Nurul Islam said that the taxation should be based on a person or entity’s ability to pay. Equitable taxation is vital for economic progress of a country that has an objective of private sector led growth, he said.
He also mentioned that the equitable taxation helps attaining revenue growth as well as supports economic progress and job creation.
He also urged government to creating enabling environment for foreign direct investment and in doing so ensuring fair, reasonable, relatively stable and avoid of arbitrariness of adjudication by officials.
He appreciated the recent announcement of the government at a meeting between NBR and Federation of Chamber of Commerce and Industry that the tax rate will be reduced gradually in next five years, no change in tax policy in middle of year by SROs and stop of harassment of taxpayers.
Responding to proposals on reducing corporate tax rate, the NBR chairman said that the revenue board has analysed corporate tax rate of developing countries and neighboring countries.
‘In many countries corporate tax rate is higher than the rate in Bangladesh,’ said Mosharraf, adding that only tobacco and mobile phone companies are paying a bit high tax but yet within the tolerable limit.
Policy Research Institute chairman Zaidi Sattar said that the government was imposing taxes on products for two reasons — one for revenue purpose and another one for protection purpose — and country’s consumers were paying protection taxes as well.
‘It’s time to apply equity principle so that the consumers can get relief from paying high taxes,’ he said.
The taxes which were imposed to fulfill the protection objective of the government were also hurting the country’s export diversification and expansion, he added.
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