Businesses for 2.5% cut in corporate tax rate in upcoming budget

Business chambers representing different sectors urged the government to reduce the tax rate by 2.5% across all corporate tax categories for the sake of the stock market and to increase the flow of local and foreign direct investment. The businesses raised the demand at the 39th NBR-FBCCI National Consultative Committee meeting held at a hotel in Dhaka on Thursday. The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) presented a 323 point demand to Finance Minister AMA Muhith, who chaired the event, for consideration in the budget for the upcoming fiscal year 2018-19. The apex trade body suggested lowering the corporate tax rate to 22.5% from the existing 25% for publicly traded companies. For non-publicly traded companies, it suggested 30% for manufacturing companies and 32.5% for non-manufacturing companies instead of the existing 35%. For merchant banks, it proposed a 35% tax rate instead of the existing 37.5% rate. For the other banks and financial institutions, it proposed setting 37.5% as the corporate tax rate for publicly traded companies and 40% for non-publicly traded companies instead of the existing rate of 40% and 42.5% respectively. The chamber has also proposed setting the tax-free ceiling for individual taxpayers at Tk3.5 lakhs  instead of the existing Tk2.5 lakhs considering the prevailing inflation rate and increased living cost of marginal taxpayers. It also proposed setting the tax free ceiling for women taxpayers at Tk4 lakhs from current Tk3 lakhs, Tk5 lakhs from the existing Tk4 lakhs for physically disabled people, and Tk5.25 lakhs from the existing Tk4.25 lakhs for gazetted wounded freedom fighters. Former FBCCI president Mir Nasir Hossain urged the government to rationalize the VAT and duty charges on stone imports from the existing total 69% to stabilize the situation. President of Bangladesh Association of Construction Industry Munir Uddin Ahmed said the price of rod has increased by 35%-38%, the price of stone by 28%, and the price of cement by 18% in last three to four months. Bangladesh Cement Manufacturers Association Vice-President and Metrocem Cement Managing Director Md Shahidullah urged the government to bring down the duty rate on clinker, an essential item for producing cement, to 5% from the existing 12%. The e-commerce sector is likely to enjoy tax exemption facilities from the next fiscal year given Finance Minister AMA Muhith’s announcement about the change in the upcoming budget. The minister also assured that he will make sure incentives are offered for direct export oriented industries from the next budget.