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The Small and Medium Enterprise (SME) Foundation on Tuesday called for exempting annual turnover of up to Tk 10 million from Value Added Tax (VAT), aiming to ease the financial burden on small businesses and foster industrial growth.
The demand was made at a view-exchange meeting on 'SME-Friendly Budget Proposals 2025-26', jointly organised by the SME Foundation and the Economic Reporters' Forum (ERF) at the ERF auditorium in Dhaka.
Presenting the proposals, SME Foundation General Manager Mohammad Jahangir Hossain emphasised the need for preferential tax regimes and the development of industrial clusters to promote small and medium enterprises across the country.
The Foundation suggested a fixed tax structure based on turnover slabs -- a flat tax of Tk 35,000 per month for enterprises with an annual turnover between Tk 10 million and Tk 20 million; Tk 75,000 per month for those with turnover between Tk 20 million and Tk 30 million; and Tk 150,000 per month for enterprises with turnover between Tk 30 million and Tk 50 million.
The Foundation has also proposed VAT exemptions on various types of agricultural machinery, including rice transplanters, potato planters, maize shellers, feed mixers, dryers, seed sowers, and vegetable washing machines -- at both the production and trading levels.
It has further recommended including items such as chira and khoi under VAT-exempt food categories.
To support small producers, the Foundation suggests exempting SMEs with annual turnovers of up to Tk 50 million from mandatory VAT registration.
It also recommends reducing the standard VAT rate from 15 per cent to 10 per cent and lowering the advance tax on raw material imports to 1.0 per cent for industries with annual imports below Tk 50 million.
The Foundation also proposes VAT exemptions on local material supplies to 100 per cent export-oriented industries.
It also calls for updated terminology in VAT regulations concerning thresher and harvester machines, and recommends waiving advance tax on rubber tracks and hydraulic transmission machinery used in agriculture.
SME Foundation Chairperson Md Mushfiqur Rahman spoke at the view-exchange as the chief guest while its Managing Director Anwar Hossain Chowdhury and President of Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA) Shamim Ahmed spoke as special guests.
ERF Acting President Ashraful Islam presided over the event moderated by its General Secretary Abul Kashem.
Md Mushfiqur Rahman said that their primary objective is to have a preferential tax regime for the SME entrepreneurs to protect their interests as well as ensuring the growth of the SME sector.
"We hope that some of our proposals will be accepted by the government which will be entrepreneur-friendly."Terming SMEs as the backbone of the country's economy, Anwar Hossain Chowdhury said the government would have to be more sensitive to the SME entrepreneurs in order to ensure their further development.
Anwar also sought separate budgetary allocation for the SME Foundation every year.
The Foundation also proposed raising duty on import of all finished goods to safeguard the local industry and reducing the corporate tax rate for the non-listed SMEs to 20 per cent from 27.50 per cent.
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