Businesses of the country have urged the government to formulate an industry- and investment-friendly budget in fiscal year 2023-24.
They demanded exempting and reducing various taxes, tax-free subsidized electricity, water and gas to facilitate productivity and export of goods, considering the ongoing global economic turmoil.
In their budget proposal, the Federation of Bangladesh Chamber of Commerce and Industries (FBCCI) urged the government to bring down the source of tax on export receipts to 0.5% from the existing 1%.
The apex trade body also expects an increase in the tax-free ceiling for individual taxpayers to Tk4 lakh, cutting corporate tax rate by 2.5%, reducing tax on capital income to attract long-term investment in the capital market, offering tax exemption to e-commerce businesses for the next ten years, tax waiver on workers' participation fund, reducing tax on goods transportation service and income from non-resident Bangladeshis, tax waiver on plastic bottle recycling.
Jashim Uddin, president of the FBCCI, said recently that the expectation is that the government will make an honest effort to formulate an industry-and investment-friendly budget in order to establish the country's productive sector on a solid foundation to meet the ongoing globalization challenges and graduation of the country from LDC.
BGMEA demands source tax reduction
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has demanded the reduction of the source tax applicable against exports from the existing 1% to 0.5% and keep it effective for the next five years in the upcoming budget for FY24.
Faruque Hassan, president of the BGMEA, also said that by doing this, manufacturers can confidently undertake mid-term business and investment plans.
He also called for the imposition of a corporate tax rate of 12% instead of the normal rate (30%).
The BGMEA president also demanded special incentives at the rate of 10% (of export value) on exports of non-cotton garments in the budget of the next FY24.
“Consumers are focusing on the recycling and circular fashion industry. In this regard, we demand a waiving of the 7.5% and 15% VAT levied on the collection of raw materials used by recycled fiber at the local level and their supply to local spinning mills respectively,” he added.
The BGMEA president also demanded a 1% duty concession on the import of all solar PV system equipment for setting up environment-friendly and energy-efficient industries.
He also demanded the withdrawal of a 10% tax on cash assistance in the export of readymade garments, saying that since cash assistance is not a business income, it is logical to keep the cash assistance out of the ambit of tax.
BCI proposes 0.1% uniform source tax
The Bangladesh Chamber of Industries has proposed a 0.1% uniform tax at source for the country's export sectors, down from the current 1%. It also proposed fixing income tax at 10%.
Anwar Ul Alam Chowdhury (Parvez), president of the BCI, urged a reduction of the corporate tax in a phased manner by a 2.5% rate in every phase without any conditions.
Moreover, he also recommended a 2% tax break for environmentally friendly and green-certified businesses.
He recommended VAT exemption on all types of utilities in micro, cottage and small-scale industries and proposed a tax holiday for them and young entrepreneurs for a minimum of five years and thereafter fixing tax between 10% and 15%.
Demands of other trade bodies
The Dhaka Chamber of Commerce and Industry (DCCI) has demanded a reduction in corporate-tax rate by 2.5%.
The Bangladesh Textile Mills Association (BTMA) has proposed a removal of taxes on man-made fibers and recycled fiber.
The Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) demanded that all types of certificates or licenses required for setting up industrial establishments and conducting business should be extended for five years.
It also urged reducing source tax on all packaging and accessories products to 0.25% from the existing 1% for the next five-year period and tax incentives on the export of packaging products.
The Bangladesh Dokan Malik Samity requested the government to find ways of waiving tax on donations for victims of the Bangabazar fire.
The Bangladesh Tanners Association sought a removal of duty on CETP equipment import.
It also demanded the digitization of the tax-collection system, addressing ‘harassment', and expanding the tax net rather than putting pressure on those who already pay taxes.
