FBCCI For Cut in Import Duty for Raw Materials

The country's apex chamber has proposed to the government to reduce import duty for basic raw materials and all capital machinery and increase tax-free limit for individual income taxpayers to Tk 240,000, considering the present economic condition.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) leaders made the proposals for budget for fiscal year (FY) 2013-14 Thursday to the National Board of Revenue (NBR).

The chamber said the government should limit the expectations on tax revenue collection and Annual Development Programme (ADP) implementation growth, considering its capacities.

NBR Chairman Ghulam Hussain said there will be no new tax in the next budget as the government will only rationalise the tax structure to remove anomalies.

"For rationalisation, there might be some hike and decrease on taxes," he added.

He said the Finance Minister will sit with the businesses on May 16 for pre-budget discussion.

FBCCI President Kazi Akramuddin Ahmed said the businesses are willing to pay tax along with business operation. He also hailed NBR chairman's comment of not imposing additional tax on businesses.

FBCCI First Vice President Helal Uddin said the businesses are facing a tough time as there were 22 inactive days until March of the current year.

FBCCI Director Abdul Huq said pre-budget proposals of the businesses were not considered properly in budgets during the last few years which is unfortunate.

"The NBR should address problems of the Alternative Dispute Resolution (ADR) process to save it from being another tax ombudsman's office. Its achievement is not encouraging so far," he said.

Apart from ADR, there may be a national level committee to resolve disputes between businessmen and tax officials, he said.

FBCCI Director Abdur Razzak said manufacturing sector businessmen are not getting rebates as they collect raw materials from the informal sector.

"There should be reduced Value Added Tax (VAT) at 3.0 per cent for those who cannot claim tax rebate while it should be 15 per cent for others," he said.

Humayun Kabir, another Director of FBCCI, said corporate tax rates should not be higher than that of the highest slab of individual income tax.

He also proposed to slap the highest tax on health hazardous products than that of mobile phone operators.

Mr Kabir said there is no term like Small and Medium Enterprises (SMEs) in the income tax law while it is a buzzword in recent times.

"Advance Income Tax (AIT) on import could be cut to 3.0 per cent from 5.0 per cent as it is increasing cost of doing business," he added.

FBCCI Adviser Manzur Ahmed strongly criticised the newly passed VAT law by Parliament blaming that it excluded all the recommendations of the businesses. The law would be implemented from 2015.

He suggested holding a tripartite meeting with International Monetary Fund (IMF), NBR and FBCCI to discuss the VAT law.

NBR Member (customs) Nasir Uddin said the disputes with businessmen could be resolved easily through discussion if customs officials are willing to do so.

Barrister Jahangir Alam, member (VAT), said the NBR will implement the new VAT law with the cooperation of the businesses.

He said the NBR incorporated businessmen's recommendation for VAT law which was excluded later by the government high-ups.

Aminul Karim, income tax member, said the existing economic situation will not support a big cut in corporate tax or significant hike of individual tax rate.

He said the individual tax rate is lower in the country than those in other countries.

The NBR chairman said for achieving a 15 per cent growth next year from the current one the NBR will have to collect an additional Tk 200 billion revenue which is a challenge.

He expressed optimism over the ADR process in income tax that generated Tk 600 million in revenues so far and nearly 100 cases are in the pipeline.

For customs and VAT wing, the ADR law will be amended to resolve its problems.

He said under and over invoicing will be checked through taking some exemplary punitive actions.

On automation of the tax department, he said there must be an integrated move to digitalise NBR and the World Bank (WB) has already expressed its desire to support the board.