In an exclusive interview with Dhaka Tribune’s Niaz Mahmud, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Vice-President Mir Nizam Uddin Ahmed talks about upcoming national budget and goals of new board of the apex body
Nizam Uddin is also a representative of the Bangladesh Electrical Association, president of Bangladesh Furniture Importers Association and director of Abahani Limited.
What do you expect from the upcoming budget?
Traders pay tax-VAT, so we want a business-friendly budget. Keeping the businesspeople under pressure, revenue collection and budget implementation will not be possible. The government should take their opinion in formulating budgets.
What is your observation about new VAT law?
The government tried to implement The Value Added Tax and Supplementary Duty Act 2012 in FY 2017-18 after some foiled attempts but the government was again forced to suspend it for two more years in the face of protests from the business community.
As per the decision of the government, the act will come into effect in 2019-20 fiscal. The government should clarify the new VAT law to traders and stakeholders so that it can be implemented easily from the upcoming fiscal year 2019-20.
People do not yet have a clear idea of how the government will implement the law and how VAT will be calculated. To increase VAT collection, the government has to be more people-friendly, which will encourage the entrepreneurs.
Tell us about slabs of new VAT law.
We want the government to set VAT as per the tiers. Reduction of income tax encourages people to pay tax and discourage money laundering. So, to increase revenue collection and widen the tax net, we are urging the government to raise the tax-free income limit to Tk3.5 lakh instead of Tk2.5 lakh.
What should be the percentage of corporate tax rate?
To attract domestic investment as well as foreign direct investment (FDI), specially in manufacturing industry, and to save the country’s stock markets, the federation has proposed cutting corporate tax.
Currently, listed companies are paying 25% corporate tax, while non-listed companies are paying 35% corporate tax.
The corporate tax rate should be brought down to 22.5% and 30% for listed and non-listed companies respectively for FY20 to increase investment inflow.
We also urged the government to reduce tax at source from 0.6% to 0.25% to help the exporters remain competitive in the global markets.
Bank interest rates are not decreasing. What is your opinion?
The average interest on bank debt is 4.3% in China, 5.3% in Singapore, 6.25% in Vietnam, 8.2% in Pakistan, 7% in Thailand and Nepal, 4.5% in Indonesia, and 4.8% in Malaysia. Last year, the Bangladesh Association of Banks (BAB) decided to bring down interest rates on lending to 9% and on deposits to 6% from existing levels.
We demand that the government reduce the bank interest rates to single digit as high bank interest rate is a major challenge in enhancing investment.
What is the goal of the new FBCCI board?
We will work to resolve problems of businesspeople. New post have been created in our organization so that we can work more.
Bangladesh has ranked 176th among 190 economies in terms of ease of doing business, according to the latest World Bank annual ratings. It is an improvement as Bangladesh was 177th in 2017.
Bangladesh will make further progress in ease of doing business and we will work with the government in this direction.