National Board of Revenue (NBR) Chairman Md. Ghulam Hussain has urged the businessmen to help the government through giving suggestions on how to plug loopholes to check the substantial amount of tax gap of the country.
“To materialise the vision to become a middle income country by 2021, the revenue collection target will have reach to Tk300,000 crore after five years, the last year of the present government’s tenure,” he told a pre-budget meeting with the Foreign Investors Chamber of Commerce and Industry (FICCI).
FICCI President Rupali Chowdhury proposed NBR to set tax measures through dialogue to make those friendly to the foreign investors.
“There should be a win-win situation and level-playing field for both the local and foreign investors,” she said.
She also said the government should sit with FICCI members to find out the measures that could help attract foreign direct investment.
“Currently, foreign investors are being discouraged by long procedures of investment registration proposals, obtaining environmental certificates,” she said. The chamber can play an effective role to help investors resolve the problems, she added.
Representatives of Nestlé, Singer, Berger, British American tobacco, Glaxo SmithKline, Reckitt Benckiser, G4S placed their respective proposals on issues related to income tax, value added tax and customs duty.
FICCI budget coordinator Abdul Khalek proposed the NBR to include the outsourcing activities in the Income Tax Ordinance 1984.
“Government can collect a good amount of revenue from the sector if it is brought under the tax net,” he said, adding that Bangladesh has earned US$20 million from the sector in 2013.
Khalek said foreign investors are investing in the sectors through offshore banking, but the investment is being hindered due to 42.5% corporate tax, which should be made uniform for the both offshore and onshore banking. The rate is below 20% in other Asian countries.
He requested the NBR to set a rational corporate tax on offshore banking by comparing the rate with other countries to attract more foreign investments.
The association also proposed reducing the corporate tax for non-publicly traded companies from the existing 37.5% to 32.5%, raising inadmissible expenses from existing Tk2.50 lakh to Tk4 lakh, tax benefit on transfer of technical knowhow, royalty, import of services, household goods etc.
The association also alleged that field level taxmen are harassing the business by misusing price declaration rules of VAT.
In response, the NBR chairman assured the chamber leaders to resolve the problem by issuing instruction to the field offices.
