Enhanced integration of NBR wings, automation stressed to raise tax-GDP ratio

In order to boost the country's GDP through tax revenue, the integration between various wings of the National Board of Revenue and external entities should be strengthened, experts have said.

In addition, they also called for simplification of the entire revenue system through automation.

"The NBR must integrate Income Tax, VAT, and Customs, along with external institutions," said Md Farid Uddin, former member of the National Board of Revenue, at a dialogue on "strengthening domestic revenue mobilisation for a higher middle-income Bangladesh," held at a hotel in the capital's Gulshan on Thursday. 

The dialogue was organised by the Policy Exchange Bangladesh and supported by the International Growth Centre.

Farid further said the implementation of automation is crucial for simplifying revenue management, and comprehensive reforms are necessary to this end. Otherwise, the expected increase in tax will not be possible.

In his speech, Bernard Haven, senior country economist of the World Bank, also emphasised automation and integration, referring to Bangladesh's "current complex economic situation". 

Dr M Masrur Reaz, chairman of Policy Exchange Bangladesh, conducted the dialogue while former state minister for planning Dr Shamsul Alam was present as chief guest. 

In his speech, Dr Shamsul Alam proposed strengthening the authority and powers of the NBR chairman.

He said in order to uphold the continuity of long-term strategies and maintain stability, the board's chairman should be appointed for a duration of at least five years.

"Corporate tax rates should be between 25 and maximum 30%," he added.

Currently, corporate tax rates in the country range from 20% to a maximum of 45%. Though corporate tax rates have been reduced for the past few years, corporate companies are said to be unable to take the benefit due to the imposition of various conditions.

In his speech, Debabrata Roy Chowdhury, company secretary and head of legal and taxation of Nestlé Bangladesh, said the company decides on investment on the basis of effective tax rate measurements.

"Currently, the corporate tax rate is 27.5%. But we have to consider an additional 5 to 15% additional taxes by inadmissibility."

For these reasons, the company has recently suspended its FDI plan in Bangladesh, he said.

Former NBR chairman Dr Nasiruddin Ahmed and Senior Country Economist of International Growth Centre Ashfaqul Chowdhury presented two separate papers at the event.