Business Report :
The Dhaka Chamber of Commerce and Industry (DCCI) hoped that the next budget will emphasize on easy and business friendly tax management, widening tax and VAT net, full automation of taxation system, encouraging local industrialization and ensuring investment friendly environment in the country.
DCCI President Ashraf Ahmed placed the Chamber’s budget recommendations for FY 2024-25 to the Chairman of National Board of Revenue (NBR) Abu Hena Md. Rahmatul Muneem at the NBR Bhaban in the capital on Wednesday.
The DCCI Placed a total 40 budget recommendations this year for consideration of the government.
DCCI President Ashraf Ahmed said that about 3.2 million TIN holders out of 10 million submitted their returns last year.
He also said that there is no alternative but to increase the tax net across the country in order to enhance the direct revenue.
Some of the key recommendations included amendment to Clause 70 regarding adjustment of business loss from total income where he suggested restoring the same clause of Income Tax Ordinance 1984 that allows a businessman to adjust losses with other sources of income.
At present, a businessman has to pay extra tax. In addition, he suggested amendment of Section 162, and allow AIT to be adjusted on future dates.
He also suggested removal of taxes on Provident Fund, Gratuity Fund, Superannuation Fund and Pension Fund to give the benefits to the private sector service holders likewise the public sector employees.
In order to reduce the cost of borrowing from foreign funds for the private sector, he recommended the withdrawal of source tax imposed on installments of foreign loans as it may discourage inbound FDI inflow and normal credit flow to the private sector, he added. Ashraf Ahmed also proposed for an Integrated Tax Administration System (ITAS) like Integrated VAT Administration System (IVAS) to ensure a full automation of taxation system and it is expected to help attract more tax payers.
At present, VAT free annual turnover ceiling is Taka 3 crore and the turnover tax is 4%. He further suggested to increase the ceiling upto at least Taka 4 crore considering inflation and increased goods supply cost.
In addition, removal of restrictions on Input VAT would be welcome as such restrictions can increase tax burdens to unsustainable levels.
He also recommended withdrawing VAT deducted at source during the distribution of locally produced solar panels. It actually increases the product price of this sector.
Ashraf said if this source VAT is withdrawn, more investment will come to this renewable energy sector. Importers have to pay 5% advance tax during the time of import according to VAT and SD Act 2012.
Though this advance tax is refundable, but businessmen sometimes face regulatory difficulties in getting this refund on time.
