FBCCI terms advance income tax raise illegal

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI)says increasing the advance income tax (AIT) from 5% to a maximum of 20% in the proposed 2021-22 budget is unlawful.

It says this move will stagnate business and increase business expenses manifold.

But it has described the proposed budget as business- and investment-friendly overall.

Addressing a post-budget press briefing at the organisation'sSalman F Rahman auditorium on Saturday, its President Jashim Uddin said AIT does not increase the government's revenue.

It just becomes a source of trouble for the business community, he said.

"At the end of the year, the government returns the tax to businesses. But even after paying this tax, no businessman knows whether he will profit from the business."

He said the FBCCI had proposed withdrawing the existing 5% AIT, but the National Board of Revenue (NBR) had ignored the call and raised the tax rate instead.

"In addition to scrapping this illegal AIT, the FBCCI is proposing adjusting all source taxes as final taxes," he added. 

He also called on the authorities to address some of the inconsistencies in import duty, VAT, and income tax in order to solve the problems of sector-based business organisations.

'Black money can be used in productive sectors'

The government did not offer any special opportunity to whiten black money in the proposed budget. 

The FBCCI chief said if any such opportunity is offered later, that should remain valid for a certain period.

He also said such opportunities should be offered only for productive sectors that would generate jobs and those should not be valid for a long time.

Otherwise, those who pay taxes regularly will be discouraged,he said.

New incentive package for SMEs

The FBCCI president demanded a new stimulus package for small and medium enterprises (SMEs) affected by the Covid-19 pandemic.

He said the government had announced a Tk20,000crore incentive package for SMEs during the first wave of coronavirus, but that had not been implemented.

"Now the second wave is going on and small entrepreneurs are in a very bad situation. Many have lost capital."

He said SMEs would benefit from the tax waiver offered to local industries.

It would have been better if the tax-free annual turnover limit for female entrepreneurs in the SME sector had been increased to Tk1 crore from Tk70 lakh, he added.

Tax reform

Jashim demanded that the policy wing and implementation wing of the NBR be separated to reform the tariff and tax structures.

He said this would create a people-friendly, investment-friendly, and productive revenue system.   

The Bengal Group vice-chairman also demanded that a task force comprising representatives of the finance ministry, the NBR, and the FBCCI be formed to further simplify the VAT law.

He demanded that VAT and income tax offices be set up in upazilas, adding the government should widen the tax net to collect revenue.

"Submitting the tax identification number (TIN) certificate has been made mandatory for public and private projects. But tax payment documents have to be made compulsory as well."

Many living in upazilasare able to pay taxes now and they have to be brought under the tax net, he said.

"We need to reduce the tax burden on those who pay taxesregularly."

FBCCI Senior Vice President Mostofa Azad Chowdhury Babu and vice presidentsMAMomen, Md Amin Helaly, Md Habib Ullah Dawn, SalahuddinAlamgir, and MA Razzak Khanwere present at the press conference.

Dhaka Chamber of Commerce and Industry President Rizwan Rahman, Metropolitan Chamber of Commerce and Industry, Dhaka President Barrister NihadKabir, Bangladesh Textile Mills Association President Mohammad Ali Khokon, and Bangladesh Plastic Goods Manufacturers and Exporters Association President Shamim Ahmed were also present among others.