Budget challenging, but implementation not impossible

Achieving the targets of the proposed national budget for FY2022-23 will be very challenging for the government in the post-pandemic period, but it is not impossible, according to two professional accountancy bodies.

The Institute of Chartered Accountants of Bangladesh (ICAB) on Saturday congratulated the government for the "business-friendly" budget, while the Institute of Cost and Management Accountants of Bangladesh (ICMAB) professionals promised a supportive role in achieving the targets.

The chartered accountants said the proposed offshore tax amnesty might be unethical, but the government will eventually be successful in bringing back a chunk of the laundered amount.  

The proposed provision offers Bangladeshis a scope for legalising their unreported assets outside the country without facing any question in the next fiscal year, subject to paying taxes.

ICAB President Md Shahadat Hossain noted that the proposed budget is business-friendly and will help Bangladesh upgrade gradually to an upper middle-income group.

The ICAB president emphasised expanding the tax net and improving the tax GDP ratio.

He expressed concern over the unchanged tax-free individual income limit as the inflationary pressure keeps mounting.

Md Humayun Kabir, a former president of ICAB, mentioned that the proposed equal tax rate for all exporters will help attract more investments from both home and abroad.

At the same time, it will also help improve the country's credit rating, he added. 

Snehasish Barua, partner at Snehasish Mahmud & Co., Chartered accountant, said the proposal to report offshore assets in tax returns will align Bangladesh with global tax practices.

Not only income tax but also net wealth will increase with the change of reporting and additional taxes will be collected through surcharge, he added.

In another press conference at the office of the Economic Reporters Forum in the capital on Saturday afternoon, ICMAB President Md Mamunur Rashid talked about the budget challenges.

He demanded that the deduction of income tax at source from service fees like advisory, consultancy, professional, technical etc should be considered as final tax.

"Senior citizens whose only source of income is pension and interest on savings certificates should be exempted from return submission," said Mamunur Rashid.

"The tax deducted on dividend income of an individual should be considered as final tax. Because it is often not possible to collect evidence of income tax deduction in this case and it is difficult, time consuming, and the taxpayer has to face many problems at the field level in this regard," he added.