The Foreign Investor's Chamber of Commerce and Industry (FICCI) has raised concerns about the proposed national budget for the fiscal year 2023-2024 and the draft Income Tax Act (ITA), 2023, emphasizing the potential impact on businesses and employees in Bangladesh.
During a press meeting, FICCI appreciated for the increased allocation in power and energy sector but expressed concerns over the perceived inadequacy of allocations for the health, agriculture, and education sectors.
FICCI specifically called for extensive reviews of the draft Income Tax Act (ITA), 2023, as certain provisions were deemed unreasonable compared to the Income Tax Ordinance, 1984. One of the major concerns raised by FICCI was the significant increase in minimum tax provisions, particularly for the Carbonated Beverage Industry, which could lead to a price hike of 30 percent or more.
FICCI requested the government to rationalize the minimum tax to 1% to facilitate industry growth and prevent a decline in consumption, tax collection, and potential impacts on foreign direct investment (FDI) and employment.
Additionally, FICCI expressed concerns about the deletion of provisos from withholding tax (WHT) provisions, which may lead to uncertainties regarding effective WHT implementation. The chamber emphasized the importance of maintaining provisions similar to those in the Income Tax Ordinance, 1984, to avoid a significant increase in tax burdens on distributors supplying to modern trade and imported goods.
FICCI further highlighted the implications of considering incentive bonuses as perquisites, potentially increasing the effective tax on companies and affecting employee earnings.
Regarding property taxes, FICCI called for a substantial reduction in transaction costs and periodic updates of mouza values to reflect market prices. They proposed a reduction in the arbitrary power of tax officers and emphasized the need for comprehensive digitalization of the National Board of Revenue (NBR) and externally connected systems to facilitate seamless transactions.
President of FICCI Naser Ezaz Bijoy commended the government's progressive changes but cautioned that some provisions may increase the tax burden on businesses and individuals, potentially impacting growth. FICCI provided recommendations to prevent adverse situations and emphasized the need for a tax-friendly environment.
The press conference was attended by FICCI officials, including Deepal Abeywickrema, Sr. Vice President, Engr. Abdur Rashid, Member of Board of Directors, Sazzad Rahim Chowdhury, Coordinator of Tariff-Taxation and Regulatory Affairs Committee, Debabrata Roy Chowdhury, Member of Tariff-Taxation and Regulatory Affairs Committee, T.I.M Nurul Kabir, Executive Director, and Snehasish Barua, Consultant.
