The Financial Express

Businesses demand graft-free tax regime

They criticise AIT on imported goods

| Updated: June 30, 2019 12:42:10

Evaly and Fianancial Express Evaly and Fianancial Express
Picture used for illustrative purpose only — Collected Picture used for illustrative purpose only — Collected

Local businesses criticised on Thursday harassment by taxmen during tax realisation, saying they want the tax regime to be free from corruption and harassment.

The businesses were also critical of imposing advance income tax (AIT) on imported goods, as it will create another trouble for them when they will go to take back the advance tax at the end of year.

They were speaking at a programme styled ERP (engage, reflect and plan of action) on the national budget for fiscal year 2019-20 and the Finance Bill 2019.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) organised the function at a city hotel with its president Sheikh Fazle Fahim in the chair.

Commerce Minister Tipu Munshi joined the programme as the chief guest.

The commerce minister said this is the high time to come out from the bad culture of harassment.

"This (harassment) is now a bad culture, and we must come out from it."

He said some people may be involved in tax dodging through different means, including abusing bond facility, and for this reason the whole community cannot suffer.

Tipu Munshi opined that providing scopes of investing undisclosed money is a good proposal in the budget.

"If we cannot utilise the money, it will be siphoned off from the country."

"To my opinion, the money should be invested in the country, and the rate of tax to whiten it should be reduced from the proposed 10 per cent," he added.

Speaking at the programme, Shafiul Islam Mohiuddin, the immediate-past president of the FBCCI, said: "We want such an environment that will be totally free from harassment."

He criticised the latest hike in trade license fee, saying that such type of high taxes on primary license will affect the growth of business in the country.

Siddiqur Rahman, the FBCCI vice president, said the government has imposed AIT on imported goods, and the tax amount will be reimbursed later as per the law.

"The amount, which will be given back after a certain period, should not be taken as tax. The businesses will again face harassment at the time of reimbursement."

Speaking at the function, Dr. Zaidi Sattar, Chairman of the Policy Research Institute of Bangladesh (PRI), said the government should depreciate local currency by at least 3.0 per cent.

It will help make export earning sector more competitive, and help boost the country's foreign exchange reserve, he opined.

The PRI chairman also said strong export earning sector is a must for achieving eight percent plus economic growth.

"We need to raise our investment to 35 per cent of the Gross Domestic Product (GDP) to spur the economic growth," he added.

Osama Taseer, President of the Dhaka Chamber of Commerce and Industry (DCCI), said the government should be careful of bank borrowing, so that it does not create any negative impact on credit flow to the private sector.

"The government has planned to borrow Tk 470 billion from the banking system. We are concerned over the borrowing, as it may affect the private sector credit flow."

Syed Mahbubur Rahman, Chairman of the Association of Bankers, Bangladesh (ABB), said the tax proposals on all types of cards will raise their cost by 3-4 times.

He said the cost was just 52 cent for each card, which will increase to US$ 2-3.

"The huge cost can neither be passed on to the cardholders nor can the banks absorb it," added Mr Rahman, who is the CEO and Managing Director of the Dhaka Bank Limited.

Golam Mowla, President of the Moulvibazar Traders Association, said prices of some necessary commodities have already shot up due to the imposition of increased duty and value added tax (VAT) on imported goods.

"We're not feeling the pinch of the hike (that much), as prices of these goods are same or still low in the international market. We will feel its impact at a time when the international market will be volatile."

Rubana Huq, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said their members are being harassed in various ways.

She also said tax at source on the incentive (provided to them) should be withdrawn.

Monowar Hossain, Chairman of the Bangladesh Steel Manufacturers' Association, said the government has imposed 5.0 per cent AIT on iron scrap import in the proposed budget.

It will raise production cost of the steel manufacturers to Tk 92,000 a tonne from the existing Tk 62,000 a tonne, and increase rod prices in the local market, he noted.

Terming the proposal as a "tsunami" for the steel sector, Mr Hossain said such type of tax will seriously affect implementation of the Annual Development Programme (ADP) and other development activities across the country.

He also demanded reducing VAT on products at different stages to save the industry.

Mahbubul Alam, President of the Chattogram Chamber of Commerce and Industry (CCCI), said the government should immediately build the Dhaka-Chattogram express line and also introduce magnetic train on the route, as the route is very much important for the economy.

The FBCCI will submit the proposals and demands of the businesses to the authorities concerned, so that these can be addressed before the budget is passed.

Salman F Rahman MP, the prime minister's adviser on private sector affairs, and Musharraf Hossain Bhuiyan, chairman of the National Board of Revenue (NBR), were scheduled to attend the function as special guests. But they could not do it for attending morning session of the Jatiyo Sangsad during the function.

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