Progressive tax system must be introduced for industrial development29 December 2022
country's present tax system is not favourable for industrial
development as it doesn't consider the losses incurred by businesses
during tax calculations. This was observed at the 36th Annual General
Meeting of the Bangladesh Chamber of Industries (BCI) held at its office
in the city's Dilkusha area on Tuesday. BCI leaders at the meeting
discussed the development and promotion of various sectors, including
micro, small, cottage, light engineering, and agro-based industries.
The businesses emphasised the necessity of a one-stop service for the industries and break the bottlenecks faced by the entrepreneurs to avail finance from different sources. The BCI has been promoting new entrepreneur development in light engineering and agro-based industrial sectors. Regarding Bangladesh's tax regime, the business leaders said losses in trade and commerce are not considered during tax fixation, gross profit is considered sector-wise which is not reasonable. Around 40 per cent of SMEs in the country discontinued operating on the back of the crisis arising from the pandemic followed by the global economic instability.
An independent international organisation-Tax Justice Network - revealed that Bangladesh is losing more than $703.40 million in taxes per year - third highest revenue loss in South Asia. For the greater interest of the economy, many sectors have been brought under tax exemption coupled with tax deduction resulting in losing the required amount of taxable income. In the budget for FY 2021-22, reduction of corporate tax, reduction of ransom on VAT dodgers, tax waivers on condition of establishing hospitals in remote areas have been introduced.
If tax revenue can be increased in a planned way, dependency on foreign loans would naturally come down. Meeting the expenses of mega projects requires a huge volume of foreign loans right now. A balanced and progressive tax system should be replaced by the old taxation system for the betterment of the country's economy.