BCI for revisiting source tax on exports

The Bangladesh Chamber of Industries (BCI) has urged the government to review and reconsider raising the source tax on exports to 1% from the existing 0.5%, saying this might hamper export performance amid the ongoing global crises induced by the pandemic and the Russia-Ukraine war.

"We want continuation of the existing rate [0.5%] of source tax on exports," BCI President Anwar-ul Alam Chowdhury (Parvez), said in a press release, on Friday.

"Otherwise, entrepreneurs will see a negative impact on their exports," he added.

The BCI appreciated different budgetary measures such as prioritising the needs of people, rationalising corporate tax for non-RMG sectors, increasing incentives for remitters, expanding social safety net and raising health budget.

"However, without good governance, effective monitoring, skilled management, accountability and transparency, the budget cannot be implemented properly," said Anwar-ul Alam.

Although the finance minister proposed limiting the inflation rate to 5.6%, he did not clarify the ways and means of implementing it, the BCI president said, adding that increasing capability of local industries was imperative for effective inflation control.

Lauding the proposal to bring the turnover tax for startups down to 0.1% from the existing 0.6%, he urged the government to raise a special fund for new entrepreneurs and to frame policies for fair use of that.

The BCI demanded withdrawal of advance taxes on raw materials for industries, and import duties on Covid-19 safety gear and raw materials, and demanded increasing the tax-free threshold for individuals to Tk4 lakh.

Criticising the conditions imposed for availing a reduced corporate tax, the trade body said private sector credit flow might see an adverse impact as the government has proposed to borrow Tk1.06 lakh crore from banks to meet its budget deficit.

Saying that increasing private investment, generating new jobs, addressing revenue shortfalls and some other issues are very challenging, it urged the government to be extra-careful in spending money. "We must reduce the waste of our resources to achieve resilience amid the global crises."