The Dhaka Chamber of Commerce and Industry (DCCI) has demanded green field projects or companies to be listed in the capital market for the development of public infrastructure.
DCCI President Abul Kasem Khan said at a press conference on the budget proposals for the fiscal year 2018-19 in Dhaka Chamber Bhaban in the city on Saturday that infrastructure was an urgent issue for development.
“Infrastructure sector is largely responsible for the failure of foreign direct investment (FDI) in Bangladesh. As our infrastructure sector gets modernized, more FDI will come into the country. But many green field projects or companies in this sector can not work due to lack of money. On one hand, interest rates are going up; on the other hand, the plan is not being implemented in the complexity of money from the capital market.
“To bring in money from the capital market, a business must be in profit for three years. There is no way to come into the capital market before that. It is difficult for green field companies to come into profit in this way. Infrastructure companies cannot get requisite funds from anywhere else. As a result, the implementation of development projects gets delayed,” he added.
The Dhaka Chamber demanded a policy environment for listing licensed government approved green field companies in the capital market.
“In order to develop the capital market, a greater cooperation and coordination among Bangladesh Bank, Bangladesh Securities and Exchange Commission, Dhaka Stock Exchange, Chittagong Stock Exchange, Insurance Development and Regulatory Authority and commercial banks is needed,” Abul Kasem said.
Abul Kasem proposed reducing the corporate tax by 5% for fiscal year 2018-19 for all categories of businesses, as well as as a 7% cut in FY2020-21 and 10% in FY2021-22.
The DCCI president said: “A 10% tax on dividend income instead of current 20% for corporate entities should be considered as final tax payment. We need dividend income removed from the existing category “income from other sources” and included into “business income” category and a provision so that dividend is only taxed when it is distributed to the ultimate shareholders.”
This tax cut can come with a re-investment condition, he suggested.
“Frame a new definition of group of companies in the Income Tax Ordinance (ITO) 1984, considering the tax exemption of corporate entities on dividend received from another entity in the same group of companies,” he added.
In addition, the DCCI proposal recommended increasing the tax-free income limit to Tk3 lakh from the existing Tk2.5 lakh.
Dhaka Chamber reiterated their demand for declaring the next three years (2019-21) to as years of infrastructure development.
“In achieving the goal, we need an investment-friendly revenue management system in the next budget that will empower the individual as well as entrepreneurs who invest in the country,” Abul Kasem said.
The DCCI president also urged the government to offer tax rebates for productive sectors and a progressive tax policy which will attract investment.
Facilities for taxpayers
Moreover, DCCI President Abul suggested that taxpayers be recognized, such as by receiving facilities at hospitals and airports.
To encourage research and development and activities related to the Sustainable Development Goals (SDGs), the DCCI urged the government to offer tax rebates on 5% investment of a company’s income.
Abul Kasem said education is the backbone of a nation, so the government should consider educational expense of Tk1.2 lakh for an individual as tax-free income.
The DCCI will also suggest taking steps to increase the tax-GDP ratio from 11.09% to 14%, introduce business-friendly tax services, expand the tax net, ensure transparency in tax and VAT collection, simplify the tax payment system and provide smart tax card to all taxpayers and launching a campaign to raise development-oriented awareness.
Abul Kasem Khan said about Public-Private Partnership (PPP): “We appreciate the initiative of the Prime Minister’s Office (PMO) directing ministries and divisions to implement 30% investment projects under PPP to meet the rising infrastructure investment demand.
“We need bankable, attractive PPP projects with high Return on Investment (ROI) for private sector engagement. As concession to private investors in PPP projects, consider spillover effects. Identify projects in ADP under Public, G2G and PPP in the budget document. Ensure private sector participation in the PPP board,” he added.
“Reduce non-performing loans by adopting cautious lending and rigorous due diligence. Adopt cautionary measures so that lending to SMEs and manufacturing sector does not slow-down.”
DCCI Senior Vice President Kamrul Islam, Vice President Riyadh Hossain, Director Andaleeb Hasan, Md Alauddin Malik, SM Zillur Rahman, Imran Ahmed and Secretary General AHM Rezaul Kabir were present at the press conference.