Moderate increase in taxes in next budget: NBR Chairman
He warned that reducing tax rates would result in an enormous revenue loss, which Bangladesh can ill afford now.
National Board of Revenue (NBR) Chairman Abdur Rahman Khan stated yesterday that in an effort to augment revenue for development work in the country, taxes would moderately be increased in the coming national budget.
In exchange for an address at an evening discussion meeting at Chattogram Chamber of Commerce and Industry (CCCI) yesterday (Thursday, 10 April), Khan discussed fears of low tax-to-GDP ratio in our nation, calling it “amongst one of the lowest in the world” and “humiliating.”
He warned that reduction in tax rate would lead to huge loss in revenue, one which Bangladesh can ill afford at this juncture.
Revenue is the key to development, he stated. “We have tremendous pressure to enhance revenue collection, otherwise we’d lag behind in bringing in progress.”
The meeting was presided over by CCII Administrator Muhammad Anwar Pasha, who was accompanied by an array of renowned businessmen and women including Khalilur Rahman, President of Chattogram Metropolitan Chamber of Commerce and Industry; Abida Mustafa, President of Chattogram Women Chamber of Commerce and Industry; Maksudur Rahman of Bangladesh Furniture Manufacturers Association; Saleh Ahmed Solaiman of Bangladesh Shop Owners Association; Showkat Ali, General Secretary of C&F Agents Association; among others.
Explaining the tax system in metaphorical terms, NBR Chairman said, “A country is similar to a family—those who work, pay, and those who do not work receive pocket money. We do the same thing, take taxes and try to support the poor.”
Read more: Small Islamic banks will be Merged into two Large Banks: Governor
He revealed that 45 lakhs out of 1.45 crores taxpayers in Bangladesh pay taxes while 30 lakhs do not pay even a single paisa. He spoke of an improvement brought about by digitisation as 15 lakhs of tax returns were submitted online this year against 4 lakhs last year.
In response to the demands for VAT reduction, Khan stated his party would reduce VAT, but in one rate for everything. “We’re ready to reduce VAT, but in one rate for everything. Companies need to agree to pay VAT in proportion as well,” said Khan. He also said NBR is considering VAT audit frequency changes to quarterly and further automatization of VAT.
The chairman complained of misuse of bond facilities, in which raw materials are brought in duty-free for purposes of exportation but find themselves diverted to domestic use. He cited gold, saying, “There is no official record of gold imports, yet tonnes can be seen in markets. Blatant misuse of bond facility and baggage rules.”
Khan also talked about widespread under-invoicing in businesses like the reconditioned automobile industry. “If an imported car worth Tk 15 lakh is sold for Tk 40 lakh, surely under-invoicing has taken place. That’s why we have to impose 500% duty,” he explained.
Denying an allegation of ship brought in for recycling and levies charged, he said, “It may appear illogical, but by exempting levies, shipping companies will bring in ships loaded with fuel beyond the weight of ships. It is an issue of overall mindset of misuse of installations.”
Responding to various pleas from businessmen, Khan declared, “We’re considering almost all of the proposals rationally and hope to include them in coming budget.”
During the meeting, Khalilur demanded duty reduction on capital equipment such as cranes, citing last year’s increase in duty to 27% from 1%. He stated its revision downwards again would give an impetus to industry growth. CCCI Administrator Muhammad Anwar Pasha gave as many as 16 budget proposals for the welfare of the business community. These included simplifying the tax and VAT system, monitoring use of bonds, relieving small entrepreneurs from Tax Deducted at Source (TDS), returning Advance Income Tax (AIT) in time, and VAT cut from 15 to a below-ten level of 8%.
