Budget reactions: ICAB for fixing yearly targets of forex inflow, outflow

The Institute of Chartered Accountants of Bangladesh (ICAB) on Saturday proposed the government to set ‘foreign cash inflow and outflow’ targets to ease the domestic exchange market volatility.    

The targets should be fixed for one financial year (FY) also due to the uncertainties in the global market, and make sure a minimum amount of spending in foreign currencies, former president of ICAB Humayun Kabir told a post-budget press conference in the city.

The institute mostly appreciated the budgetary measures for FY 2023-24 and defended the proposed minimum income tax of Tk 2,000 annually for the holders tax identification number (TIN).  

Organised by the ICAB, its president Md Moniruzzaman termed the budget a time-befitting initiative ahead of the LDC graduation.

Despite the Russia-Ukraine war, higher inflation, rocketing commodity prices, dollar market volatility, slowdown in business, investment and employment, and other global uncertainties, he said the government’s development budget of Tk 2.77 trillion is an encouraging step forward.

Moderating the event, former ICAB president Humayun Kabir said the TIN holders already are paying taxes in different names.

He said the minimum tax is nothing new as he referred to the Section 82 (C), making it clear that even if there is no profit in the business or if the tax is collected from additional sources, the law of minimum tax collection, non-payment of interest and penalty is in force.

Currently, there are many bank depositors who actually pay tax (deducted at source) but do not file returns.

Due to the requirement of filing returns (in lieu of e-tin) many are creating refunds, might require issuance of certificate to maintain their files, but this tax imposition would not be unethical for cost recovery.

He said the biggest argument is that the tax net and the number of returnees will increase, while the businessmen and not the ‘theoretical intellectuals’ would have to bear the responsibility of this tax. In his welcome address, ICAB chief executive officer Subhashish Bose said the joint initiative of the National Board of Revenue (NBR) and ICAB to implement Document Verification System (DVS) would help achieve desired revenue.

The DVS would bring transparency and accountability in the financial sector, along with tax reform and improvement in tax-GDP ratio, while increasing revenue collection, he said.

Founding partner at Snehasish Mahmud & Co Snehasish Barua presented a synopsis of taxes and VAT collection targets and criterion of the government.

However, the ICAB appreciated the government move to introduce environmental surcharges on multiple vehicles which could protect our environment, reduce the number of vehicles and increase the use of public transport.

IT also lauded inclusion of “market place” in the definition of “online sale of goods” with a view to facilitating business.

The ICAB also welcomed the proposed VAT rebate of more than 5.0 per cent at the manufacturing stage of “optical fiber cable” to encourage production of import substitute products and reduce tax burden at the local production stage.

The Institute also expressed its eagerness on the upcoming ‘Income Tax Act 2023’ to be placed in the parliament soon.

The ICAB expected the Act to help make taxpayers more compliant in the coming days.

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