Foreign investors have urged the government to reduce the corporate tax by 10 percentage points for all businesses.
The current corporate taxes for different taxes range from 25% to 45%. The highest 45% rate is on mobile phone operators. They want it be slashed to 35% and that of publicly traded companies to 15% from the current 25%.
Foreign Investors’ Chamber of Commerce and Industry (FICCI) made the call in its budgetary proposals for the fiscal year 2017-18 at a pre-budget meeting with the National Board of Revenue in Dhaka on Monday.
NBR Member for Income Tax Policy Parvez Iqbal chaired the meeting. FICCI President Rupali Chowdhury led the delegation.
“Due to very high disallowances on account of royalty fee and excess perquisites (double tax), additionally another 8% to 10% tax is to be paid by the company on top of the marginal tax rate,” said FICCI president.
She said: “From foreign investors’ point of view, the effective tax rate is very high, making Bangladesh non-competitive compared to other markets in the world.”
“We, therefore, strongly urge that the existing corporate tax rate should be reduced by 10% for at least five years. This will help corporate houses plan and prepare their own budgets on the basis of fiscal rates announced and simpler to collect revenue by the government,” Rupali Chowdhury said.
This reduction of tax will also attract more investment and thereby more employment will be created, she added.
The FICCI also demanded a fixed tax policy for at least five years to facilitate the investors in preparing better investment and tax plans.
FICCI president said: “There should be consistency at least in tax policy for three to five years so that investors, particularly foreign investors, can prepare their investment and tax plan in better way. Tax measures should not be changed every year.”
She requested the NBR for giving equal treatment to entrepreneurs saying that currently some industries were given preferences while some others can’t access to the tax authority.
The foreign investors’ chamber also requested the revenue board for issuing a gazette notification within April about the implementation of the new value-added tax law to assure the investors about the new VAT regime.
At the same programme, Bangladesh Women Chamber of Commerce and Industry demanded reduction of the VAT rate to the highest 5% from flat 15% in the new VAT law which is set to be implemented from July 1.
BWCCI President Selima Ahmad sought a separate income tax and VAT structure for woman entrepreneurs to promote investment by women.
India Bangladesh Chamber of Commerce and Industry representative AK Chowdhury demanded reduction of VAT rate to 7.5% in the new VAT law.
He urged the NBR to raise the VAT-free annual turnover ceiling from the current Tk30 lakh.