Foreign investors urge govt to slash corporate tax

The Foreign Investors' Chamber of Commerce and Industry has proposed that the government gradually reduce their corporate tax, terming it high in comparison with other countries.

Besides, the organisation has sought an amendment to a number of provisions of the Income Tax Act, including setting a 0.5% limit on the company's promotional expenses and lowering the spending limit on royalties and technical fees.

The chamber president, Rupali Chowdhury, also managing director of Berger Paints, made these proposals during a pre-budget discussion with National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem on Tuesday.

The NBR organised a discussion with the stakeholders with the aim of preparing the budget for Fiscal Year 2021-22.

At the meeting in the NBR conference room, Rupali Chowdhury proposed separate amendments to the Value Added Tax, Income Tax and Customs.

She said investment of two foreign companies has come to Bangladesh through them and the same companies have also invested in India.

Expenditure on operations and taxes in India is much lower than that in Bangladesh, the business personality said, adding that it is becoming difficult for them to do business here.

She suggested reducing the corporate tax rate to regular taxpayers like foreign companies citing their compliance.

Rupali Chowdhury said the tax rate for non-listed companies had been reduced from 35% to 33% last year. This time it should be reduced by 2% for listed companies.

At present, corporate tax ranging from 25% to 45% is levied from companies under eight categories, she observed, saying that corporate tax rate in Bangladesh is higher than that in the competing countries.

The corporate tax rate is 30% in India, 26% in Sri Lanka, 20% in Afghanistan and 20% in Vietnam. In addition, Myanmar and Indonesia have 25% each while Malaysia and Singapore have 24% and 18% corporate tax respectively.

In the last budget, up to 0.5% of total turnover was kept tax-free for company's promotional expenses. The NBR adds the same provisions to royalty and technical expenses.

Rupali Chowdhury proposed to increase the limit, mentioning that companies in the manufacturing sector have to spend a lot on market research and promotion.

In addition, the organisation proposed to have an opportunity to import capital equipment through any port of the country.

Nasir Ezaz Bijoy, CEO of Standard Chartered Bank, made a proposal of setting a limit on cash transactions, noting that increasing digital transactions would increase tax collection.

He also proposed to levy tax if the cash deposit in the bank exceeds a certain number.

The NBR chairman assured the chamber people of considering their proposals.

However, he said to keep up the economic growth of the country, the government will increase tax collection as well as create opportunities for business people.

Abu Hena Rahmatul Muneem said: "After the corona attack, our idea was that there would be no investment in the private sector."

Increasing the government investment is a must to keep the economy afloat while money must reach common people and tax collection has to be increased, he suggested.

"You want to do business and we want to collect tax. There has to be coordination between the two to give you benefits," said the NBR chair.