Prime Minister's Economic Affairs Adviser Dr Mashiur Rahman on Saturday stressed the need for a business-friendly tax regime that would not change frequently and hinder the business growth.
"Frequent changes in the tax rates are not good steps …" he told a webinar as chief guest, emphasising on the need for a stable tax and duty regime for 7-10 years. "But all investors may not get this benefit as all investments do not come at the same time."
Dhaka Chamber of Commerce and Industry (DCCI) in collaboration with daily Samakal and Channel 24 organised the pre-budget discussion, chaired and moderated by DCCI President Rizwan Rahman.
BRAC chairman Dr Hossain Zilllur Rahman joined the programme as special guest.
Adviser Dr Rahman pointed out that there is no debate about the country's lower tax-GDP ratio because of lower tax elasticity.
"We have to give rebates at different levels and that's why the tax elasticity is low, leading to poor tax-GDP ratio," he explained. "We should focus on increased revenue collection for development and, at the same time, facilitate and incentivise businesses."
The adviser noted that the development work will stop if the revenue target cannot be achieved.
Dr Hossain Zilllur stressed the need for an economic recovery plan in the next budget like that of the current one as the second wave of the Covid pandemic would have a huge adverse impact on the economy.
Social protection, especially in the urban areas, should be a major concern and get priority in the budget for FY2021-22.
He urged the government to consider incentives for the pandemic-hit businesses, especially the CMSMEs, and suggested quick disbursement of the stimulus packages through engaging mobile financial services as a delivery mechanism.
"We need a transition from cheap labour economy to skilled labour economy and a game changing policy review needs to be done," he added.
Abul Kasem Khan, chairperson at the BUILD, said: "If we can create employment, additional tax rebates can be offered."
He suggested reducing the effective tax rate, which is sometimes 45-50 per cent.
In his welcome address, DCCI president Rizwan Rahman expected the government would consider measures in the next budget that will surely be friendly to business and industry as well as revenue.
"The budget will have a clear indication for the economic recovery amidst the pandemic time."
He also expressed the hope that the next budget will have special attention to taxation and VAT policy, infrastructure, industry and trade as well as the financial sector.
The DCCI president said that if the government with the help of vibrant private sector work hand in hand, Bangladesh will be able to recover its economic momentum despite the pandemic.
Energy expert and energy affairs adviser to the past caretaker government Dr Mohammad Tamim stressed on ensuring the energy linkages and road connectivity with the 100 economic zones (EZs).
"For rapid growth, renewable energy cannot do it alone. Price predictability too is a must for the businessmen," he said.
He suggested considering the issues of tax and VAT on LNG in the next budget as the dependency on gas will increase further.
National Board of Revenue (NBR) member (Tax Policy) Md. Alamgir Hossain said that the government always tries to facilitate the businessmen and emphasised on strengthening the capital and bond markets.
He said it is not true that the overall tax rate is 32.5 per cent. "We have tax rates of 25 per cent, 15 per cent and even zero."
NBR member (Customs Policy and ICT) Syed Golam Kibria said the budget will have a priority on the agriculture sector. "We will also work on trade facilitation agreement compliance, tariff rationalization," he said.
The NBR will examine the fiscal incentive on hybrid car imports, he hinted. "Duty cut on import of freeze used for super shops will also be considered."
NBR member (VAT) Masud Sadik informed that the online VAT return submission has increased at present. "We are focusing on automation of VAT return."
He also informed that there are only 48,000 offline VAT returnees and in future the offline VAT return system would be stopped as the online system ensures more transparency.
Senior partner at the KPMG Adeeb Hossain Khan raised the issues of withholding tax and high corporate tax rate, and urged for a result-oriented tax appeal system in the tribunal.
Regarding the VAT law, he suggested allowing rebate on imports.
CEO at the IPDC Mominul Islam urged for a long term bond market and demanded reducing corporate tax for NBFIs to 30 per cent.
CEO at the Standard Chartered Bangladesh Naser Ezaz Bijoy stressed on ensuring easy access to finance for the SMEs. "Incentives should be given for export diversification," he said, urging a cut in the tax rate on NRB bonds.
Rahel Ahmed, CEO at the Nagad, suggested incentivising the mobile financial services.
Asif Ibrahim, chairman at the Chittagong Stock Exchange, said the corporate tax for both listed and non-listed companies needed to be slashed.
Kazi Inam Ahmed, president of Bangladesh Supermarket Association, demanded reviewing the extra VAT of 5.0 per cent which the super shops needed to pay.
Md Fazlul Haque, former president of BKMEA, said there are a good number of green factories in Bangladesh. The government may consider duty-free import of ETP machinery.
Md Jashim Uddin, vice chairman at the Bengal Group of Industries, said the next budget should give incentives to the industry sector for employment generation.
Md Faizur Rahman, CEO and MD of United Hospital Ltd., said there is a lack of confidence in the health sector, which needs macro level planning considering it a priority sector like that of IT or RMG sectors.
"We need 250,000 doctors and 500,000 nurses. PPP should be incentivised in the health sector," he added. He recommended creating a fund to implement mega health projects.
ASM Mainuddin Monem, president at the Private Economic Zones Association of Bangladesh, said that infrastructure development is going on and it will take time to complete.
In his concluding remarks, acting editor of Daily Samakal Mustafiz Shafi urged the government to cut import duty on newsprint and corporate income tax for the newspaper industry.