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Suggestion to make tax system more pro-growth, transparent


Published : 17 Apr 2021 09:03 PM

Experts at a conference suggested that National Board of Revenue (NBR) should reduce the TDS as per global practice, fix minimum tax rate for individual tax- 25 percent ,  impose tax at the rate of  20 percent to attract one person company and offering activity incentive for Bangladeshi products producers.

They also stressed laying concentration on thrust sectors like   Leather, Jute and Garment Fashion design, etc to create a country brand in international market.

The recommendations were made at  a virtual Members’ Conference on ‘Policy paper on direct and indirect tax’ organized by the Institute of Chartered Accountants of Bangladesh (ICAB)  on Saturday.

Muhammad Abdul Mannan, Minister, Planning Division, Ministry of Planning, GoB  attended the conference as  the Chief Guest. Md. AlamgirHossain, Member (Tax Policy) of National Board of Revenue (NBR), Md. MasudSadiq, Member (VAT Policy) of National Board of Revenue (NBR);  Khondaker Muhammad AminurRahman, Member, Grade-1 (Customs: Audit, Modernization and International Trade) of National Board of Revenue (NBR) and also Syed GolamKibria, Member (Customs Policy & ICT) of National Board of Revenue (NBR) participated in the conference as  Special Guests.   

ICAB President MahmudulHasanKhusu FCA delivered address of welcome while MdHumayunKabir FCA, Member Council and Past President-ICAB conducted the conference as the Session Chairman.

 Mohammad Al Maruf Khan FCA, Partner, HowladarYunus& Co., Chartered Accountants and   SnehasishBarua FCA, Partner, Snehasish Mahmud & Co., Chartered Accountants jointly presented the keynote papers.

As Chief  Guest Planning Minister  MA  Mannan, MP said, Chartered Accountant ensures compliance of different corporate and tax laws during preparation of Financial Statements, Auditing of Financial Statements

He said, ICAB’s web based Document Verification System (DVS) will enhance transparency of Financial information which ultimately, will reduce tendency of evasion of taxes. He further said, considering, the cost related to tax collection, it is better to chase the evasion of tax by big tax payers than chasing marginal tax payer.

Experts also observed that NBR should carry out research and take a strategic decision about allowing exemption to increase government revenue from private sector. 

They opined that tax rate changes has significant impact on investment decision and investors will get benefits to prepare budget  and plan accordingly based on the tax rate.

 They further suggested that NBR Annual Report should publish  timely.  Since the market trends are rapidly changing, if information are available timely, it will benefits the potential investors, policy makes, economists, and organisations to assess the economy, performance and make decisions.

The discussion help NBR finding out the area of leakage, eliminating the areas of harassment of  tax payers, and bringing all tax payers under online systems. To promote agriculture sector the government should allow tax incentive through SRO, some assesses manipulate these incentives to evade taxes, they observed and suggested that  NBR can reduce a threshold  limit such as up to 25 lakhs  Taka to minimize the evasion o manipulation.

ICAB President Mahmudul Hasan Khusru FCA said, taxation is indispensable in order to support the basic function of a sustainable state and to create the context for economic growth. An improved tax system is the key to financing public services, reducing inequality, making government more accountable and helping to improve self-reliance, he said.

He said, our tax to GDP ratio is exceptionally low; even lower than those of other countries in the region and beyond. This indicates that there must be some incompatibilities, he added.

He said, The tax system in Bangladesh is gradually improving, raising more revenue and reducing the dependency on aid.