Better govt-business ties must for attaining revenue goal: Dhaka Chamber

Dhaka Chamber of Commerce and Industry President Barrister Md Sameer Sattar has recommended boosting cooperation between government tax authorities and businessmen for helping attain the revenue collection goal proposed for the next fiscal year.

The government has proposed the huge Tk7.61 lakh crore national budget apparently to keep the economy resilient against rising geopolitical headwinds. However, authorities also seem to realise the importance of increasing coordination with the private sector to face existing economic challenges like the forex crisis, inflationary pressures, reserve depletion etc, Barrister Sameer commented in initial reactions to the budget proposals announced on Thursday at the National Parliament.

The business leader praised the government for raising the tax on importing software, lifts, solar products, electronic products and others as the move would bolster business prospects for the domestic players in these sectors. Barrister Sameer also lauded the proposal to scrap import tariffs and value-added-taxes on 13 petroleum products as well as the proposed 5% tax reduction on diesel imports and efforts to harmonise diesel source taxes, which if implemented would reduce inflationary pressures for both consumers and businesses.

He, however, urged reducing corporate tax rates, as otherwise Bangladeshi businesses would fall behind global competitors and proposed taking into account business expenditures in every individual year for determining corporate tax rates. He also sought reduction of corporate tax rates for non-listed firms by 2.5%.

He also urged the government to avoid imposing value-added-taxes on locally manufactured mobile phones to avoid hurting the sector. For ensuring food security, the government should reduce prices for the diesel used in the agriculture sector on top of the proposed reduction in gas prices to support local fertiliser production. Taxes should also be imposed on modern agricultural equipment imports to boost local machinery manufacturers and ensure food self-sufficiency.

Barrister Sameer said the proposal to raise over Tk1.32 crore from banks would shrink financing sources for businesses, increase the number of defaults and ultimately constrict private sector investment.

The barrister proposed raising the tax-free personal income threshold to Tk5 lakh instead of the proposed Tk3.5 lakh from the existing Tk3 lakh margin, in light of the ongoing consumer inflationary pressures. The proposal of collecting minimum Tk2,000 from taxpayers even if there is no taxable personal income would also increase financial burden for inflation-plagued consumers and should be avoided. Vat taxable turnover should also be expanded to reduce tax pressures while the Vat collection and auditing processes should be automated to ensure transparency. Barrister Sameer said a specific guideline should be rolled out to employ tax collection agents and properly monitor their activities with a view to increasing the tax net.