The Foreign Investors' Chamber of Commerce and Industry (FICCI) have placed its proposal at a pre-budget consultation meeting organized by the National Board of Revenue (NBR) on Wednesday.
FICCI delegation led by the President Naser Ezaz Bijoy, members of the Board of Directors, committee members and the executive director attended the meeting at the Rajashwa Bhaban in the city's Agargaon, reads a press release.
NBR chairman Abu Hena Md Rahmatul Muneem presided over the meeting while other respected members and senior officials of NBR also participated.
In the consultation meeting, FICCI President Naser Ezaz Bijoy proposed for reduction of the effective tax rate.
He said: “The effective tax rate prevailing in our country is extravagant. Though the applicable corporate tax is 20% and 27.5% for the publicly traded and private limited company respectively, the effective tax rate is much higher due to the implication of 30B, 82C (2) and deduction of tax at source. Therefore, we are proposing to reduce the effective tax rate in conjunction with the tax rate in our neighbouring countries.”
FICCI also recommended for Rationalization of Tax Deduction at Source (TDS). the FICCI president stated: “In certain cases, TDS is considered minimum tax for that source of income. Even though the corporate tax is reduced to 27.5% after maintaining certain conditions, still the business is unable to recap the benefits. Therefore, the impact of minimum tax against TDS should be rationalized.”
He suggested using DVS system to identify income and expenses which can be useful to rationalize TDS and eliminate TDS from the minimum tax provision gradually.
Regarding digitalization and integration, Naser Ezaz Bijoy appreciated some initiatives taken by NBR to digitalize the regular routine work such as return submission, Acknowledgement and return submission confirmation, A- challan on TDS etc.
Meantime, he also expressed concern that they are observing the digitalization process is very slow. He recommended implementing digitalization at all levels so that taxpayers' hassle will be minimized. For instance, online hearing in assessment, CTA, TAT and ADR.
Chamber's President mentioned: “At present, every registered person is required to issue a tax invoice (Section 6.3) manually while making supplies. The current process is consuming time as well as an obstacle to the pathway of digitalization. If we look into the world economy, our national economy is doing well in comparison to the world market. Hence, the technique used to gather Mushak must adhere to international standards.”
He recommended the development of an automated VAT challan, also known as an E-Invoice or Electronic VAT challan, which must replace the need for a manual tax challan. The implementation of this system will make it much simpler for taxpayers to conduct business while also making it much simpler to oversee the tax authorities and taxpayers. Hence, Issuance of tax invoices (Mushak-6.3) should be automated, and E-Invoice or Electronic VAT challan should be introduced,” FICCI president added.
FICCI President opined that, by correctly implementing the customs assessment rules, duties should be calculated depending on the exchange rate. Only in exceptional circumstances, where it is impossible to identify the exchange rate, should the following guidelines ensure that they are applied in light of the rules as explained.
To acquire up-to-date information about the global market, our further recommendation is to subscribe to the NBR product database, he added.
He said: “We have observed over the last few years that NBR has changed the HS codes for various products which are in complete disagreement with WCO HS code's guidelines. For reclassification variation, the importer is suffering huge costs on importation. Therefore, we are recommending removing this sort of reclassification on the products HS Code.”