Foreign investors express satisfaction over government's tax reform measures, FICCI says

Highlights:

• Challenges remain such lack of simplification in the tax system, multiple VAT rates, excessive discretionary power of officials
• Policy to give parliament the authority to decide on tax exemptions on the cards

Representatives of foreign investors in the country have expressed satisfaction with the government's reform initiatives, particularly those undertaken by the National Board of Revenue (NBR), TIM Nurul Kabir, executive director of the FICCI said today (29 April).

Speaking at a seminar titled "Macroeconomic Perspective and Fiscal Measures", the Foreign Investors' Chamber of Commerce and Industry (FICCI) executive director said, "Over the last ten months, we have observed extensive reforms, and we, the foreign investors, feel encouraged."

He, however, also pointed out some challenges which persisted, including the lack of simplification in the tax system, multiple VAT rates, excessive discretionary power of officials, a cumbersome legal process, and insufficient automation in the tax collection system.

Kabir emphasised the need to boost investor confidence, stating, "Foreign investors need confidence during this period…we hope to see a clear direction in the upcoming budget." 

He also noted that "our member companies contribute about 30% of total government revenue."

NBR Chairman Abdur Rahman Khan said, "In the upcoming budget, we will provide signals aimed at facilitating business operations. At the same time, we will take strict measures [against non-compliant taxpayers]."

He acknowledged that compliant taxpayers often bear the brunt of policy changes, stating, "We have already reduced the discretionary power of tax officials."

Khan also disclosed plans to reduce tax exemption benefits in the upcoming budget. 

"We are going to formulate a policy that gives the parliament the authority to decide on tax exemptions," he said.

"This policy will close the door for individuals or institutions who currently obtain tax exemptions through personal connections or influence," he added.

In his keynote presentation, Dr M Masrur Reaz, chairman of Policy Exchange Bangladesh, said, "The discretionary power of tax officials and the unrealistic revenue targets set by top government officials are the root causes of problems within the revenue department.

"Nonetheless, the NBR has taken commendable steps, such as halting the traditional audit system, to reduce discretionary pressures," he noted.

The seminar was jointly organised by the Economic Reporters' Forum (ERF) and FICCI.

ERF President Doulot Akter Mala and Secretary General Abul Kashem also spoke at the event.