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DCCI for lowering corporate tax rate by 2.5%

The Chamber placed its budget recommendations to NBR for FY2022-23

The Dhaka Chamber of Commerce & Industry (DCCI) placed a set of total 40 recommendations for the upcoming national budget of FY2022-23 to the Chairman of the National Board of Revenue (NBR) on March 9, 2022.

DCCI President handed over the Chamber’s budget recommendations to the Chairman of NBR Abu Hena Md. Rahmatul Muneem at a pre-budget discussion meeting held at NBR headquarters.

Figure: DCCI President handed over the Chamber’s budget recommendations to the Chairman of NBR Abu Hena Md. Rahmatul Muneem at a pre-budget discussion meeting.

Meanwhile, the DCCI Chief Rizwan Rahman proposed to increase the tax-free income limit for the individual taxpayer from existing taka 3 lakh to taka 4 lakh considering the increasing inflation and cost of living situation.  He said that about 27 lakh taxpayers regularly submit their returns on an average every year which is very nominal for an economy like Bangladesh. He also said that NBR should take a long-term strategic plan to increase the number of taxpayers up to at least 8 million in the next 10 years of time. He also underscored the importance of full automation of the overall taxation system.

In order to become competitive in the region, the DCCI President proposed to reduce corporate tax at a rate of 2.5% for both listed and non-listed companies which are now 22.5% for listed companies and 30% for non-listed companies.  He then proposed to slash tax on income of corporate dividend from existing 20% to 10%. He said that it will encourage the local investors to re-invest as well as boost efficiency in the stock market.

Currently, businesses that have an annual turnover of taka 3 crores are exempted for VAT. But he recommended increasing this turnover limit to taka 4 crores in the next budget and also requested to impose turnover tax based on product’s value addition or profit margin.

Rizwan Rahman also recommended minimizing the lengthy process of getting a bond license for the leather goods and footwear industry. Moreover, he suggested giving bond renewal facilities for at least 3 years to these sectors like the RMG sector. He also demanded tax exemption on locally produced machinery and components for electric vehicle charging stations in the country in order to promote a sustainable and environment-friendly automobile industry within the country.

Lastly, the DCCI President Rizwan Rahman stressed an easy and business-friendly taxation system, increasing tax and vat net, full automation of tax management, product diversification, encouraging local industrialization and an investment-friendly environment aiming to attain the goal of economic development.

Chairman of NBR Abu Hena Md. Rahmatul Muneem said that trade organizations can arrange knowledge-sharing activities to make their members aware of various policies that NBR takes related to revenue and duty structure.

He also said that before LDC graduation our private sector have to enhance their capacity because after graduation many facilities that they are enjoying now will not be available then. To create a business-friendly environment in the country NBR is relentlessly working and NBR is simultaneously trying to increase the tax net. In the last two years government was more flexible in terms of the tax rate to boost GDP and employment generation and this year the budget will be made considering macro policy perspective.

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