In his initial reaction to the national budget for the 2018-2019 fiscal year, Dhaka Chamber of Commerce and Industry (DCCI) President Abul Kasem Khan suggested the government consider slashing the corporate tax rate by more than the proposed 2.5%.
“In the proposed budget, the government reduces the corporate tax rate for publicly and non-publicly traded banks, insurance and NBFIs by only 2.5%. The government has also set a target to increase the private sector investment to GDP ratio to 25.15% from the existing 23%, which will be difficult if the corporate tax rate is not cut further,” the DCCI president said.
He added that it would take Tk25,000 crore in investment to increase the private sector investment to GDP ratio by 1%.
Furthermore, the DCCI president hailed the government decisions to withdraw the double taxation system on dividends, reduce duties on the import of accessories for locally produced motorcycles, mobile phones and tyre tubes, improve the country’s position in the Ease of Doing Business Index.
The DCCI president also praised the ADP budget allocation of Tk1,73,000 crore, which amounts to a 16.59% increase on the previous allocation, as well as a Tk100 crore allocation for skill development projects.
In addition, he recommended that the budget for railways be doubled in order to improve transportation networks, the VAT rate remains the same, and that 5% tax rebates on gross income be given to companies invested in research and development.