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NBR unhappy over evading turnover tax

  • Published at 06:50 pm April 23rd, 2014

The National Board of Revenue (NBR) chairman Md. Ghulam Hussain has expressed his grave dissatisfaction over the businessmen’s unwillingness to file their genuine annual turnover taxes.

He uttered his anger yesterday while the leaders of Dhaka Chamber of Commerce and Industry (DCCI) urged the NBR to increase the tax-free turnover limit for small businesses and industries from existing Tk80 lakh to Tk1 crore and fix the turnover tax rate at 2% from the existing 3%.

The trade body also put forward a set of proposals consisting 21-point recommendations for the coming budget for the fiscal year 2014-15 at a pre-budget discussion with NBR officials held at its headquarters in the capital.

“Nobody wants to file annual turnover taxes. Although a few people file the turnover tax, most of them file their taxes, just showing less than Tk10lakh as their annual turnovers,” alleged Md. Ghulam Hussain.

DCCI director Haider Ahmed Khan said: As the small investors and industries are contributing largely to the development of the local industries, the limit of annual turnover tax should be increased just to further encourage them in investment.

In response, NBR member (VAT policy) Jahangir Hossain said, “Most of the businesses, who files their turnover taxes, mention their annual turnover in between Tk4 lakh to Tk5 lakh and the maximum is below Tk 11 lakh. Whatever the areas of his or her business are, they are just simply showing Tk10 lakh as their turn over, but if we go deep into it, we might find that they get minimum annual turnover of Tk5 crore to Tk10 crore.”

“People are not willing to file turnover taxes and if we increase the limit, who will come to file the taxes?” he further questioned.

Putting emphasis on keeping the income of the chambers out from the tax net, the DCCI president Mohammad Shahjahan Khan requested the NBR not to impose taxes on income of chambers and trade bodies as all these are non-profit organisations.

In response, NBR chairman Md. Ghulam Hussain reminded that the government had already exempted the income of the chambers generated from the house rents.

Pressing the other demands, DCCI director Khan said the existing 10% surcharge on properties worth over Tk2 crore was too high and it should be 10% on valued between Tk5 crore and Tk15 crore.

The other demands from the chamber include reducing the tax on dividend to 15% from existing 20%, withdrawal of tax while opening local Letter of Credit (LC), continuation of tax holiday facility for newly established industrial undertakings till 2020 etc.

The trade body also demanded cancellation of Advance Trade Vat (ATV) system in import level and cancellation of 9% VAT from the rents generated from commercial establishments.

In response, NBR member Jahangir Hossain said: The businesses should not be worried about the VAT from the commercial rents as the VAT will be paid by the person, who consumes the service, not by the landlords.

The DCCI also said the corporate tax on the listed companies should be brought down to 20% from the current 27.50%, private limited companies at 27.5% from the existing 37.5%, and bank and financial institutions at 30% from the existing 42.5%.

Attending the meeting, the DCCI leaders also requested the NBR not to harass them in the name of audit or universal self assessment.

They also urged the NBR not to increase the tax net, imposing more taxes on the existing taxpayers, not to increase the tax free income ceiling for individual taxpayers to Tk3,00,000 from existing Tk2,20,000, for the sake of protecting the local industries, rather than giving any benefit to the foreign companies etc.