The country’s different trade bodies and business associations have placed a number of recommendations and demands to the government for incorporating those in the national budget for the financial year 2016-17 to be placed in Jatiya Sangsad today. They want that their recommendations and demands will be paid heed with due importance in the budget proposals that are scheduled to be placed by finance minister AMA Muhith in the parliament in the afternoon. Like the previous years, most businesses on various recent occasions have raised some common demands for reduction of corporate tax, multiple value-added tax rates for different sectors and continuation of package VAT system and increase in the ceiling of tax-free individual income. The businesses who are engaged in manufacturing have demanded some benefits for the protection of local industries including imposition of supplementary duty on imported finished goods. The major demands by the trade bodies and business associations are highlighted below:
FBCCI
The Federation of Bangladesh Chambers of Commerce and Industry has demanded introduction of multiple value-added tax rates for different sectors and continuation of package VAT system for small and medium traders instead of implementing a single VAT rate at 15 per cent for all. The country’s apex trade body has demanded income-tax threshold be raised to Tk 3 lakh and consider wider tax cuts to avert tax evasion and capital flight. The apex chamber has proposed Tk 3.25 lakh as the ceiling for women and senior citizens above 65 years, Tk 4 lakh for people with disability and Tk 4.5 lakh for injured freedom fighters. The FBCCI has also demanded 40.5 per cent corporate tax for non-publicly traded banks and financial institutions while 38.5 per cent for publicly traded banks and financial institutions. It has also demanded withdrawal of the provision of excess profit tax in the income tax ordinance. The chamber has recommended 15 per cent VAT on value addition instead of total sales price, increasing VAT-free turnover threshold to Tk 36 lakh and levying 3 per cent turnover tax at production stage for businesses having annual turnover above Tk 36 lakh to Tk 1.5 crore.
DCCI
The Dhaka Chamber of Commerce and Industry has demanded a reduction of the rate of corporate income tax for listed companies to 25 per cent from 27.5 per cent, for merchant banks to 35 per cent from 37.5 per cent and for brokerage houses to 30 per cent from 35 per cent. It has recommended for an increase in tax-free income limit for individual taxpayers to Tk 3.5 lakh from the existing Tk 2.5 lakh considering the augmented cost of living and high inflation in the country. The chamber has urged the National Board of Revenue to take initiative to terminate the source of undisclosed money generation along with discontinuation of legalising scope for untaxed money. The trade body has said that highest rate of corporate tax should be brought down to 35 per cent from the existing 45 per cent considering cost of doing business and inflation. The DCCI has demanded minimum individual income tax be set at Tk 3,000, Tk 2,000 and Tk 1,000 on the basis of locations of the taxpayers.
MCCI
The Metropolitan Chamber of Commerce and Industry has demanded a cut in corporate income tax rate and increase in tax-free income ceiling for individual taxpayers. The trade body has demanded a reduction of the highest income tax rate for individual taxpayers to 25 per cent from the existing 30 per cent. It has also said tax-free income threshold for female and citizens above 65 years old should be Tk 3.3 lakh, for people with disability to Tk 3.85 lakh and for war-wounded freedom freighters to Tk 4.5 lakh. The chamber has also demanded removing the disparity being faced by domestic industries and reduction of duty in import of basic raw materials and intermediate goods saying the measure will increase competitiveness of domestic industries. The MCCI has demanded a reduction in the maximum rate of individual income tax to 25 per cent from the existing 30 per cent while the DCCI said the rates should be set ranging from 5 per cent to 20 per cent instead of the current 10 per cent to 30 per cent.
BWCCI
The Bangladesh Women Chamber of Commerce and Industry has demanded 4 per cent value-added tax at all stages on business for women entrepreneurs instead of 15 per cent proposed at the new VAT and Supplementary Duty Act. Like the FY16, the trade body has demanded an increase in the threshold of tax-free income for individual women taxpayers to Tk 3.5 lakh from the existing Tk 2.75 lakh. The chamber has also sought reduction of trade licence fees, increasing the ceiling of VAT-free turnover to Tk 50 lakh, an increase in cash incentive on potato exports, reduction of customs duties on import of paper for printing industries, removal of harassment in customs houses, and duty waiver on capital machinery import. It has recommended continuation of Tk 100 crore as grant in the proposed budget for the development of women entrepreneurship and allocation of 15 per cent from the equity and entrepreneurship fund of Bangladesh Bank.
BGMEA
The Bangladesh Garment Manufacturers and Exporters Association has demanded continuation of the income tax at source on export at the rate of 0.30 per cent for the next five years. The BGMEA has demanded full import duty waiver on fire-fighting equipment for all types of factories including the export-oriented ones in the proposed budget to help ensure the safety of workers and assets. The association has sought permission for duty-free import of fire proof colour coating used in pre-fabricated building materials for running remediation and retrofitting of RMG factories. The apparel exporters have demanded the facility of special tax calculation at the reduced rate of 10 per cent for RMG exporters that the NBR withdrew in June 2014 be revived for the next five years, introducing normal tax calculation at 35 per cent for the sector.
BKMEA
The Bangladesh Knitwear Manufacturers and Exporters Association has demanded duty-free import of fire preventing and energy saving machinery for all export oriented sector and exemption from VAT on different services including laboratory test, consultancy, compliance audit, legal consultancy, CSR-related, building construction and courier service charges. The BKMEA has requested the revenue board to impose export tax on cost of cutting and making of apparel products instead of freight on board prices. It has also demanded the sector be exempted from paying 1 per cent duty on capital machinery import.
BTMA
The Bangladesh Textile Mills Association has demanded withdrawal of the minimum tax, which is now 0.50 per cent of the annual turnover, for the primary textile sector, and the sector be exempted from paying 1 per cent duty on capital machinery import. The BTMA has demanded tax holiday facility for new investment in spinning, weaving and other factories under primary textile sector to encourage more investment in the sector.
BGAPMEA
The Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association has urged the revenue board to authorise the association to give utilisation permission that will allow its member firms to avail duty-free imports of raw materials.
FICCI
The Foreign Investors’ Chamber of Commerce and Industry has demanded rationalising the corporate income tax structure for non-publicly traded companies in the budget proposals to promote industrialisation and attract more foreign investment to the country. It has proposed to reduce corporate income tax rate for non-listed companies by 10 per cent to 15 per cent to minimise the gap between the marginal and the effective tax rate. The FICCI has also sought an increase in tax-free income threshold to Tk 3 lakh from existing Tk 2.5 lakh for individual taxpayers, and a reduction of the highest slab of income tax rate for individuals to 25 per cent from 30 per cent.
DSE
The Dhaka Stock Exchange has demanded an increase of tax-free dividend income limit up to Tk 1 lakh from existing Tk 25 thousand with a view to spurring market condition. The DSE has proposed to reduce turnover tax to 0.015 per cent from 0.05 per cent in the upcoming fiscal year in a bid to reduce transaction cost for encouraging investors in participating on the trading and for increasing overall turnover of the stock exchanges. The Dhaka bourse has demanded a gap of 10 per cent income tax between listed companies and non-listed companies and a reduction of merchant banks tax rate equal to trading rights entitlement certificate holders from the next fiscal year.
REHAB
The Real Estate and Housing Association of Bangladesh has demanded absolute indemnity for investment of undisclosed money in the housing sector for the next 10 financial years. The REHAB has demanded that the registration cost of land and flats including fees and value-added tax be lowered to 4 per cent from 14 per cent of the investment and a minimal registration fee be set for the secondary market to increase the cash inflow in the sector. It has demanded a re-financing facility for 30 to 35 years at a single-digit interest rate. The REHAB has also demanded withdrawal of customs duties on import of fire extinguishers and other instruments for residential and commercial buildings.
BARVIDA
The Bangladesh Reconditioned Vehicles Importers and Dealers Association has demanded a special duty benefit in import of used hybrid cars and year-wise depreciation benefit at higher rates on import of used cars from the next fiscal year. It has demanded 25 per cent depreciation facility for one-year-old cars, 35 per cent for cars up to 2 years old, 45 per cent for cars up to 3 years old, 50 per cent depreciation for up cars up to 4 years old and 55 per cent depreciation facility for used cars up to 5 years old. The BARVIDA has demanded a restructure of a slab to bring the cars with 1501cc to 2500cc under the duty structure. It has also recommended withdrawal of supplementary duty on import of microbus to facilitate public transport in the country.
AMTOB
The Association of Mobile Telecom Operators of Bangladesh has demanded withdrawal of VAT on internet use and modem sales and withdrawal of the Tk 100 SIM tax and Tk 100 SIM replacement tax as well.
BCWMA
The Bangladesh Ceramic Wares Manufacturers Association has demanded a withdrawal of supplementary duty on locally-made ceramic tiles and an increase in SD on imported finished goods to give more protection to the domestic industry so that the sector can grow further. The BCWMA has also demanded reduction of customs duty to 5 per cent from existing 10 per cent on import of different raw materials for ceramic making including crude mica, talc, calcium carbonate, potash soap, silk screen, etc.
BAPI
The Bangladesh Association of Pharmaceuticals Industries has demanded withdrawal of customs duties and VAT on import of raw materials for manufacturing anticancer medicines arguing that the import of anticancer medicines enjoyed VAT and duty-free facility. The BAPI has also sought a reduction in customs duties on import of specialised racks used in preservation of medicines and pharmaceutical laboratory furniture to ensure the quality of medicines in line with international standards.
