Focus on tax justice to foster a fair business environment
AkijBashir Group Managing Director Sheikh Bashir Uddin shares his insights into the upcoming budget for the fiscal year 2024-25 in an interview with The Business Standard
Sheikh Bashir Uddin, the managing director of AkijBashir Group and a prominent entrepreneur in Bangladesh, shared his positive outlook on the upcoming budget for the fiscal year 2024-25 with The Business Standard. The following are the key insights from his interview:
What are your expectations for the budget for FY25?
The government's fiscal policy aims to expand the tax net significantly. However, I believe the focus should shift towards ensuring tax justice. By prioritising tax justice, the government can create a level playing field for businesses in Bangladesh and foster a more conducive business environment.
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It is also worth mentioning that expanding the tax net requires additional resources and structural reformation. On the other hand, tax justice can be achieved within the current structure without significant reform.
What challenges lie ahead for the NBR in ensuring tax justice?
Ensuring tax justice involves overcoming several challenges, such as simplifying the tax assessment process, addressing the minimum tax, and moving away from the conventional fixed gross profit margin ratio. The National Board of Revenue (NBR) plays a crucial role in tackling these issues.
The current system of collecting advance tax and advance VAT is a commendable initiative. It allows for pre-adjustments, reducing the scope for VAT and tax evasion. However, the refund process for overpayments needs to be more efficient.
How is the minimum tax creating challenges for businesses?
The minimum tax can be burdensome for businesses, especially those incurring losses. This tax is based on a percentage of turnover, becoming a business expense rather than being levied on profits. Such a system can be unfair to compliant businesses that experience fluctuations in their financial performance.
How can the NBR prevent tax or VAT evasion to ensure tax justice?
It is essential for the NBR to focus on sector-specific audits rather than targeting individual companies. By auditing entire sectors, such as the water business sector, the NBR can verify financial records more effectively. This approach would encourage all businesses within a sector to comply with tax regulations, knowing they might be audited in the future.
A transparent and effective regulatory framework would also benefit businesses, making operations simpler and promoting overall growth.
In summary, focusing on tax justice rather than merely expanding the tax net can create a fairer and more robust business environment in Bangladesh. This shift would not only support compliant businesses but also ensure a more equitable distribution of the tax obligations.
