The Economic Reporters Forum (ERF) has proposed to increase the tax-free income limit of an individual to Tk5 lakh in line with inflation in the upcoming FY27 budget.
At the same time, the organization recommended setting a flat rate of VAT at 7%, limiting the maximum rate of personal tax to 30%-35%, and reducing or withdrawing excise duty and profit tax on bank deposits up to a certain limit.
These proposals were presented at the pre-budget discussion for FY27 held at the National Board of Revenue (NBR) conference room in Agargaon in the capital on Tuesday (March 31). The meeting was presided over by NBR chairman Md Abdur Rahman Khan.
ERF general secretary Abul Kashem presented a written proposal on behalf of the organization.
The written statement said that ERF believes that the joint initiative of NBR and ERF can play a positive role in preventing revenue evasion and increasing the tax-GDP ratio.
The proposal also said that to reduce the tax burden on the middle class and low-income people, a system of refunding additional tax through Mobile Financial Services (MFS) can be introduced.
It has also been recommended to provide a system of refunding tax deducted at source on bank interest for those who do not have taxable income.
The organization has also proposed to limit the tax rate on essential goods, education, and medical-related materials to a maximum of 0.5%.
The ERF has emphasized on formulating a separate revenue policy for the development of small and medium industries and providing loan facilities on easy terms.
At the same time, it has been called upon to consider the issue of keeping private provident funds tax-free and imposing wealth tax through the market valuation method.
It has been recommended to reduce tax rates on print, television and online media for the sake of sustainable development of the media industry.
In addition, it has been proposed to launch separate helplines for the three departments of the NBR—Customs, VAT and Income Tax—and appoint focal points in each department to assist investors and taxpayers.
The proposal also says that Medium Taxpayer Units (MTUs) based on district and city corporations can be formed to improve the quality of taxpayer services. At the same time, it has been recommended to publish revenue loss estimates to ensure transparency and accountability in tax collection.
In the context of LDC transition, the organization has also proposed to gradually reduce the import duty structure as well as reconsider the tax rate at source on services provided to non-residents.
The ERF also recommended conducting a national survey to determine the actual number of taxable people and expanding tax administration activities at the upazila level.
At the same time, it has been said to launch an integrated digital system for real-time information exchange between banks, land offices, city corporations, BRTA and various utility institutions to monitor the financial transactions of car and house owners.
The ERF has also emphasized taking strict measures to stop illegal cigarette production and preventing money laundering by strengthening the effectiveness of the transfer pricing unit.
In addition, it has been proposed to modernize the Research and Statistics Department of the NBR, launch impact analysis in tax administration, and introduce a unique ID by merging TIN and BIN to simplify tax-VAT-customs activities.
At the meeting, the ERF leaders said that the ongoing initiatives of the NBR to increase the number of taxpayers were yielding positive results and hoped that it will increase further by the end of the year.