The chamber criticized the proposed value added tax (VAT) slabs of 5%, 7.5% and 10%, saying they were not sustainable
Bangladesh Chamber of Industries (BCI) on Saturday urged the government to review the proposed 15% tax on excess reserve exceeding 50% of a company's paid up capital and 15% tax on stock dividend.
The chamber criticized the proposed value added tax (VAT) slabs of 5%, 7.5% and 10%, saying they were not sustainable.
The demand came at BCI’s post-budget press conference, held at the BCI Auditorium in Motijheel, Dhaka.
BCI President Anwar-Ul-Alam Chowdhury (Parvez) said that the proposed measures on capital market would discourage capital creation and reinvestment. The proposals would negatively affect the capital market, he added.
“We strongly urge the government to reconsider these proposals,” Parvez told the briefing.
On June 13, Finance Minister AHM Mustafa Kamal placed the national budget proposals for FY2019-20 fiscal year before the parliament. Mustafa Kamal proposed a 15% tax on the excess reserve of a publicly traded company exceeding 50% of its paid up capital.
Another 15% tax on stock dividend was also proposed in the budget.
Stakeholders and experts have demanded the government scrap the proposed tax on retained earnings and reserve, saying the move would harm share market stakeholders.
A total of 209 publicly traded companies now have to pay Tk10,792 crore in taxes as the government has proposed to impose 15% tax on excess reserve exceeding 50% of a company’s paid up capital.
According to Dhaka Stock Exchange (DSE) data, there are 312 companies listed with the prime bourse, of which 209 have excess reserve over 50% which stood at Tk25,952 crore. Total reserve of 209 companies amounts to Tk97,901 crore.
BCI president thanked the finance minister for creating a special fund of Tk100crore for young entrepreneurs, offering 5% tax rebate for companies employing the disabled persons and formation of a national human resource development fund in the draft budget.
Parvez said the sustainable development goals (SDG) could be easily achieved if the SME sector got priority and young entrepreneurs were encouraged.
The leading chamber urged the government to form a different tax, tariff and trade facilities department at the NBR.
The BCI president requested the government to withdraw the proposed 5% advance income tax.
Besides, the BCI proposed to bring down the corporate tax rate to 10% for export-oriented sector. It demanded lowering the tax at source for all exporting products to 0.25% .
The proposed budget for FY 2019-20 was business friendly and a challenging budget, BCI president said.