DCCI president proposes to reduce corporate tax rate by 2.5pc

The Dhaka Chamber of Commerce & Industry (DCCI) has proposed to reduce the corporate tax rate by 2.5 per cent for both the listed and non-listed companies to become competitive in this region.

The corporate tax rate is now 22.5 per cent for the listed companies and 30 per cent for the non-listed companies.

DCCI President Rizwan Rahman made the proposal when the DCCI placed a total of 40 recommendations for the upcoming national budget for FY23 before the Chairman of the National Board of Revenue (NBR) Abu Hena Md Rahmatul Muneem at a pre-budget discussion meeting on Wednesday held at NBR Bhaban in the capital, reports BSS.

Meanwhile, the DCCI Chief proposed to increase the tax-free income limit for the individual taxpayers from the existing Tk 0.30 million to Tk 0.40 million considering the increasing inflation and cost of living.

He said that about 2.70 million taxpayers regularly submit their returns on average every year which is very nominal for an economy like Bangladesh.

"The 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," he added.

Rizwan also underscored the importance of full automation of the overall taxation system.

He proposed to slash tax on income of corporate dividend from existing 20 per cent to 10 per cent. "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 Tk 30 million are exempted for VAT. But, he recommended to increase this turnover limit to Tk 40 million in the next budget and also requested to impose turnover tax based on product's value addition or profit margin.

The DCCI President also recommended minimising the lengthy process of getting the bond license for the leather goods and footwear industry.

Moreover, he suggested giving bond renewal facility for at least 3 years to these sectors like the RMG sector.

He also demanded tax exemption on locally produced machineries and components for electric vehicle charging stations in the country in order to promote a sustainable and environment-friendly automobile industry within the country.

The DCCI President also stressed on 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.

The NBR Chairman 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 said, "Before the LDC graduation, our private sector has 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 working relentlessly while the NBR is also trying simultaneously to increase the tax net,"

Muneem said in the last two years, the 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.