Need to reform effective tax rate regime: FICCI president

Despite some significant positive changes in the proposed budget, foreign investors in Bangladesh still have major concerns about the effective income tax rate, which exceeds 40% in some cases, leaders of the Foreign Investors Chamber of Commerce and Industry (FICCI) said.

"Despite the decrease in the corporate tax rate, the effective tax rate here in Bangladesh still exceeds 40%, and the country needs reform in that area," said Zaved Akhter, president of FICCI, during a seminar titled "Decoding Finance Bill 2024" held today.

"There is empirical evidence that in countries where tax rates are lowered, tax collection increases," said Zaved Akhter, who is also the managing director of Unilever Bangladesh Limited.

He expressed dissatisfaction with the tax hike on talk time and internet usage.

"Tax increases on mobile phone talk time and internet usage contradict the government's vision for a smarter Bangladesh," he added.

Snehasish Barua, a partner at Snehasish Mahmud and Company, delivered a comprehensive technical presentation at the seminar, focusing on the overview and changes introduced through the FY25 budget.

He discussed the challenges in achieving the revenue target and the implications of proposed changes in taxation law on individuals and businesses.

Additionally, he presented an analysis of effective tax rates across different industries, highlighting both the business-friendly changes and areas of caution for taxpayers.

During the seminar, officials from the National Board of Revenue (NBR) emphasised the importance of building trust between taxpayers and tax officials.

Ikhtiar Uddin Mohammad Mamun, director general of BCS Tax Academy, an organ of NBR, said, "One of the major challenges for both taxpayers and tax authorities is the lack of trust. It is essential that we address this issue properly."