The foreign investors on Tuesday accused the revenue board of not keeping its promise made at the time of formulating the new VAT law.
The provisions of the law are not in keeping with the promises, Rupali Chowdhury, president of the Foreign Investors Chamber of Commerce and Industry (FICCI), told a pre-budget meeting at the National Board of Revenue (NBR) premises.
NBR chairman Abu Hena Md Rahmatul Muneem presided over the meeting.
The FICCI members pointed out that the new law has brought about fundamental changes, but the businesses are yet to derive any tangible benefit in line with the promise made by the NBR.
They suggested major overhauling of the law to make it simple so that the businesses could enjoy the benefits.
Ms. Chowdhury, who is the managing director of Berger Paint Bangladesh, urged the NBR to make the VAT registration rule simple and alleged that the law has reinstated the controversial price declaration method by introducing the 'input-output coefficient'.
She said the businesses were supposed to get some benefits, including tax rebate and other issues. But, she said, those do not exist in the new VAT and Supplementary Duty Act-2012, that was put into effect on July 01, 2019.
FICCI member Naser Ezaz Bijoy, chief executive officer (CEO) of Standard Chartered Bank, Bangladesh, proposed the NBR impose tax on cash deposits by setting a threshold. A nominal tax could be imposed to discourage cash deposits in the banks, he added.
He also proposed to rationalise taxes on property registration in line with the mouza rates.
Mr. Bijoy also recommended reviewing the tax structure for the exporters and scrutinising the interest income of the bank depositors by sorting them out through National Identity (NID) numbers.
The FICCI president urged to reconsider some fiscal measures like imposing minimum tax on companies without taking into account whether they are incurring loss or making profit, levying tax on promotional expenses. She also called for bringing down the corporate tax rate gradually to 25 per cent from 32.5 per cent, and maintaining consistencies while devising fiscal measures.
Md Abdul Kader Joaddar, managing director and chief financial officer (CFO) of the Standard Chartered Bank, said 20 per cent withholding tax on payment made to overseas party for offshore banking has increased the borrowing cost.
Unilever head of taxation Sayeed Ahmed Khan said that the customs does not allow higher transaction value of imported goods that causes unusual hassle for the businesses.
The FICCI members said the manufacturing cost in Bangladesh is higher than in India and China. This is an obstacle to stay competitive on the part of industries, they added.