Individual, corporate tax rates ‘unlikely to be cut’

Chairman of the National Board of Revenue (NBR) Md. Abdur Rahman Khan on Sunday said individual and corporate tax rates are unlikely to be reduced in the upcoming national budget, as they are already lower than those in peer economies of the region.

However, he expressed the hope that the existing disparities in tax rates across different levels might be addressed in the next budget.

Mr. Khan was addressing a pre-budget discussion titled "Live Pre-Budget Discussion: Private Sector Perspective" held at the Dhaka Chamber of Commerce and Industry (DCCI) office in Dhaka.

The NBR chief said that the existing tax, VAT, and customs rates would be rationalised to boost economic activity, promote trade, and help ease inflationary pressure.

Former FBCCI President Abdul Awal Mintoo, speaking at the event, said that a prolonged contractionary monetary policy is not conducive to the growth of the private sector.

The Bangladesh Bank has been maintaining a tight monetary stance since May last year to fight the stubbornly higher inflation on the economy.

Mr. Mintoo stressed the need for better coordination between revenue and related economic policies to improve the business environment.

"To raise the tax-to-GDP ratio, to my mind, bringing more non-taxpayers under the tax net, especially those who possess Taxpayer Identification Numbers (TIN) but do not pay taxes.

The discussion was presided over by DCCI President Taskeen Ahmed.

Other key speakers include Mahbubur Rahman, President of the International Chamber of Commerce-Bangladesh, former Commerce Minister and BNP Standing Committee Member Amir Khosru Mahmud Chowdhury; former FBCCI President Mir Nasir Hossain; former DCCI Presidents Abul Kasem Khan and Rizwan Rahman; and BKMEA President Mohammad Hatem.

Addressing the recent imposition of tariffs on Bangladeshi exports by the US government, Mr. Mahbubur Rahman urged the government to open negotiations with US authorities. He suggested forming a task force comprising private sector representatives, including from the DCCI, to tackle the issue.

Mr. Rahman stressed the need for full automation of the customs and revenue system to ensure transparency, noting that the national budget should be seen as a long-term strategic document for guiding the economy and business.

He also called for stronger support to local investors in the upcoming budget to enable greater contributions to the economy.

Former Commerce Minister Amir Khosru Mahmud Chowdhury said that economic expansion hinges on increased investment and business growth, which require comprehensive policy reforms.

"We have a mismatch in long-term financing. Collecting short-term deposits and offering long-term loans is not sustainable, and this is hampering the desired business progress," Chowdhury said.

He called for more effective and investment-friendly tax policies, highlighting that Bangladesh lags behind in this area.

Former FBCCI President Mir Nasir Hossain pointed out that the ongoing budget deficit and contractionary monetary policy have both restricted credit flow to the private sector. He urged the government to present an inclusive, pragmatic, business- and investment-friendly budget in the upcoming fiscal year.

He also advocated for reduced government spending through austerity measures to manage the revenue deficit. "Reducing harassment in the tax system will encourage more people to pay taxes," Mr. Hossain added.

jasimharoon@yahoo.com and talhabinhabib@yahoo.com