The Dhaka Chamber of Commerce and Industry (DCCI) proposed the lowering of corporate tax to 25% for the next fiscal year to increase private sector investment and create scope for employment generation.
In a budget proposal placed to the National Board of Revenue (NBR), the DCCI has proposed to bring down the corporate tax from 35% to 25% for non-listed firms and from 25% to 20% for listed ones for the upcoming fiscal year for 2019-2020.
It also urged the government to bring down the corporate tax rate for non-listed companies to 23% and 20% for the FY21 and FY22 respectively.
The budget proposal will be discussed with the NBR today, where DCCI president and other board members are expected to attend.
In addition, the trade body also proposed an increase to the tax-free income limit to Tk3 lakh from the existing Tk2.5 lakh and to cut rates in different slabs of individual category.
Increasing the tax free income limit and reducing the tax rate will widen the tax net and encourage individuals to pay taxes, the DCCI argued in its budget proposals.
Citing government data, the proposals said the overall inflation rate has increased by 22.59% from FY16 to FY19. As a result, the people’s cost of living has increased manifold, shrinking their purchasing capacity.
The chamber also urged the government to set multiple rates in Value Added Tax (VAT) ranging 5%, 7.5% and 10% instead of a single rate of 12%.
As per the Value-added Tax and Supplementary Duty Act-2012, VAT rate is 12%.
The trade body also urged the government to keep the tariff value method unchanged for essential commodities and its ingredients.
To Increase the use of jute goods and to boost the jute sector through diversification, the trade body has urged the government to keep the sector out of the VAT purview for the next five years.
For the country’s $30 billion apparel sector, the trade body demanded exemption of VAT on environment friendly and energy efficient equipment and services used in the apparel industry.
The DCCI argued that the apparel sector needs special attention as it employs 32.52% of total people in the industry.
The DCCI in its proposal has placed special emphasis to increase the private sector investment rate to GDP, create more employment and enhance private sector participation in attaining Sustainable Development Goals (SDGs).
In the proposals, the DCCI urged for an easy and business friendly taxation system, widening VAT and tax networks, infrastructural development, export diversification and boosting local industrialization.
Further, the trade organization called for an investment friendly business environment so that the nation achieves 8.5% GDP growth in the next fiscal year.