Two leading trade organizations on Wednesday called for a gradual reduction in corporate tax rates to attract more domestic and foreign direct investment.
The Dhaka Chamber of Commerce and Industry and the Bangladesh Chamber of Commerce put forward their respective budget proposals for fiscal year 2021-2022 as part of a pre-budget discussion with the National Board of Revenue at their Dhaka headquarters.
The DCCI proposed that corporation tax for listed and unlisted companies be gradually reduced by 2.5 percent per year over the next three fiscal years.
The corporate income tax rate should be reduced to 25 percent for unlisted companies by fiscal year 2024 and for listed companies from the current 32.5 percent to 17.5 percent in the next three years.
The DCCI also proposed to impose a 10 percent tax on corporate dividend income instead of the current 20 percent.
The NBR should also offer tax breaks to companies that would invest 5 percent of their taxable income in research and development.
The leading trade organization also recommended full tax administration automation to bring all taxpayers under the tax net.
It also called for an upward revision of the annual sales limit for the imposition of sales tax to Tk 4 crore from the current Tk 3 crore and the collection of sales tax based on the value added or the profit ratio of the products.
DCCI President Rizwan Rahman said lowering corporate taxes would boost local and overseas investment.
He said the tax authority should review proposals to revive business confidence after COVID, ensure a simple and business-friendly tax structure, encourage industrialization and promote an investment-friendly environment.
The BCI called for a reduction in the corporate tax rate for listed companies from the current 25 percent to 20 percent and applied for a tax vacation facility for the home, micro and small industries for three years to relieve the sectors.
BCI President Anwar-ul-Alam Chowdhury Parvez said the tax rate for unlisted companies shouldn’t go above 25 percent.
The tax-free income limit for individual taxpayers should also be raised from the current 3.5 lakh to 4 lakh, he said.
He also called for an increase in the annual turnover limit for the collection of sales tax to Tk 10 crore from the current Tk 3 crore and a reduction in the sales tax rate from 4 percent to 3 percent.
The NBR should also regularly update the price database for imported goods to prevent misrepresentation and tax evasion, he said.
In a separate meeting, the Bangladesh Private Medical College Association called for a 15 percent reduction in income tax on private medical colleges.
The association also called for the withdrawal of duties and taxes on the import of surgical gloves and equipment imported from private hospitals.
BPMCA President MA Mubin Khan presented the proposals at the meeting.
However, Abu Hena Md Rahmatul Muneem, chairman of the NBR, said there should be no problem paying taxes when a nonprofit is making a profit.
However, he said the NBR might consider offering tax exemptions for setting up hospitals in rural areas.