Budget should reduce tax burden amid pandemic: FBCCI

Businessmen demanded reduced corporate taxes in the budget for the fiscal year 2021-22 to help them cope with the impacts of the second wave of the pandemic. 

All kinds of advance income tax and advance tax should be withdrawn, said Sheikh Fazle Fahim, president of the Federation of Bangladesh Chambers of Commerce & Industries at a virtual budget consultative meeting on Sunday.

On the other hand, he proposed invoicing of every transaction to bring transparency in business, which, he said, would help increase government's revenue collection and the tax-GDP ratio.

The discussion was presided over by Abu Hena Md Rahmatul Muneem, chairman of the National Board of Revenue, with Finance Minister AHM Mustafa Kamal as the chief guest.

Businessmen will be able to make self-declaration three times, Fahim said, adding that punitive action should be taken if their claims are proven false after that. The stringent measure will expand the coverage of the tax net at the grassroots level.

At present, o.5% tax is imposed on the total turnover exceeding Tk 3 crore, irrespective of profit and loss. The apex trade body suggested increasing the amount to Tk 5 crore.  

Moreover, VAT should be levied on the actual value added by dealers, distributers and similar traders, corporate tax should be lowered and tax collection should be automated, according to the FBCCI.

"It has become difficult for businessmen to pay advance income tax. We demanded that it be reduced in the previous budget and the government did so," Fahim said.

The advance income tax should be withdrawn altogether in the next two-three fiscal years, he added.

Former president of FBCCI and MP Shafiul Islam Mohiuddin said tax collection was facing disruptions due to complications in Harmonised System (HS) codes intended to identify goods being shipped.

HS codes should be reassigned for many products in the upcoming budget, he added. 

Tax collection by the NBR has been improving every year, and further pressure on it will hamper balance in the economy, said Md Jashim Uddin, vice-chairman of the Bengal Group and former first vice-president of the FBCCI.

The finance minister assured the businessmen of a budget that will be befitting in the ongoing crisis.

"The demands will be reflected in the budget. No new burden will be imposed on anyone," he said.

Amid the crisis, the NBR has to continue doing its job, and as part of that it has to adopt strategies, Finance Minister AHM Mustafa Kamal said.

Acknowledging that the capacity of the NBR has been strengthened, he said the aim of the tax collector is to create a tax-friendly environment.

If the tax net broadens, taxes will come down. "We are working towards that."