Excess tax hike leads to tax evasion: Business leaders
Business leaders have warned that excessive increases in tax rates will likely lead to a rise in tax evasion.
"When I can't make a profit due to additional taxes, I will be forced to undue way," said Taskeen Ahmed, president of the Dhaka Chamber of Commerce and Industry, at a programme held on 4 June at the capital's Gulshan Club.
SMAC Advisory Services Limited organised the programme focusing changes of the finance ordinance.
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Citing the automobile sector as an example, he said, "The tax rate has suddenly jumped from 10% to 25%. Those who are currently importing vehicles by paying proper taxes, will now be tempted to evade taxes and import illegally. This kind of policy change makes enforcement difficult."
Mustafa Alim Aolad, a chief financial officer, criticised unrealistic profit expectations, saying, "Every year businesses asked to show increased gross profit by taxmen, compared to the previous year. How can a Business keep showing more? It's absurd. That's why so many cases are stuck in the High Court for years."
Iqtiar Uddin Md Mamun, commissioner of the Large Taxpayers Unit, noted that a major cause of tax-related issues is the lack of trust between businesses and officials from the National Board of Revenue (NBR).
He pointed out that 40% of the country's economy remains informal.
"Many companies report losses, yet the national economy is growing. How is that possible?" he asked.
Delivering the keynote address, Snehasish Barua, FCA and a renowned tax advisor, provided an in-depth analysis of the amendments introduced in the Finance Ordinance 2025. His presentation covered major updates, including higher tax rates, projected tax burdens, and key changes in both personal and corporate tax regulations.
Dr Md Abdur Rouf, a member of the NBR, urged companies to become tax-compliant.
Speaking directly to corporate representatives, he said, "Some companies instruct their employees to evade taxes. You must not follow such directives, even if they come from your employers."
Zareen Mahmud Hosen, Sukanta Bhattacharjee, director of SMAC Advisory Services Limited also spoke the programme.
