Over 80pc businesses find current tax rates 'unfair'

Eighty-two per cent of businesses consider the current tax rate "unfair" and a major obstacle to growth, according to a survey conducted by the Centre for Policy Dialogue (CPD).

The survey found that 79 per cent of participating businesses identified lack of accountability among tax officials as a major problem, while 72 per cent cited corruption in tax administration as their primary obstacle. Another key challenge highlighted was the absence of a fully digital tax filing system.

The findings were unveiled on Tuesday at a city hotel dialogue, where CPD Senior Research Associate Md Tamim Ahmed presented the keynote paper on corporate tax and VAT reforms.

The session was moderated by CPD Research Director Dr Khondaker Golam Moazzem, with NBR Chairman Md Abdur Rahman Khan attending as the chief guest.

Conducted among 123 enterprises in Dhaka and Chattogram, the survey showed that 65 per cent of businesses frequently end up in disputes with tax officials over routine tax demands.

Many complained that officials impose taxes arbitrarily, without proper explanation or prior notice, creating invisible pressure beyond the actual tax amount, which is often more harmful to business operations.

In a separate survey focusing on VAT, businesses identified the complexity of multiple VAT rates as the main hurdle. About 73.5 per cent of participants said complicated VAT laws are a significant challenge.

Other issues include unclear VAT policies, limited cooperation from tax officials, lack of training and awareness, classification difficulties of goods and services, and high compliance costs.

The VAT survey, following the World Bank Enterprise Survey framework, covered 389 enterprises in Dhaka and surrounding districts.

Former finance secretary Siddiqur Rahman, speaking at the event, noted that the keynote paper made 61 recommendations.

"Online return filing has been made mandatory for individuals; it should also be implemented for corporates. The education sector could be treated separately for tax purposes.

"The paper recommends reforming corporate tax so that the statutory rate for both export-oriented and non-export sectors does not fall below 15 per cent. I believe this is implementable," he added.

AH Mahbub Salekin, president of the Tax Bar Association, said, "Corruption remains relatively high in tax offices. If cases were resolved more quickly and transparently, revenue collection would improve, reducing dependency on foreign aid. The NBR chairman has shown sincerity in this regard."

Md Moshiur Rahman, NBR first secretary (VAT Supervision and Taxpayer Services), added, "We have announced a 10-year revenue strategy. Expanding VAT coverage can deliver better long-term results and reduce many current complaints about VAT rates. At present, lowering VAT rates would negatively affect revenue collection."

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