The Foreign Investors' Chamber of Commerce and Industry (FICCI) has proposed bringing changes to the fiscal measures on a 'prospective' basis and reducing corporate taxes by 5.0 to 10 per cent for all categories of businesses in the budget for the next fiscal year.
The chamber whose members contribute around 30 per cent of the total tax revenues has also urged the National Board of Revenue (NBR) to impose VAT on transaction value instead of base value and follow valuation rules-2000 to ascertain assessable value of all imported goods.
A FICCI delegation, led by its Vice President and also Chief Executive Officer (CEO) of Unilever Bangladesh Kedar Lele, placed the proposals to the NBR chairman on Monday.
Naser Ezaz Bijoy, CEO of Standard Chartered Bank, Md Mahtab Uddin Ahmed, CEO of Robi Axiata, and TIM Nurul Kabir, executive director of FICCI, among others, were present at the pre-budget meeting.
The FICCI leaders said all changes, including that of tax rates through the Finance Act, should be made applicable prospectively.
"The clause relating to allowance for bad debt provision should be reinstated, which was withdrawn from the assessment year 2007-08, corresponding income year 2006, with a clear guidance as to what would be the base of bad debt allowances," the FICCI proposal said.
The chamber suggested excluding the 'supply which constitutes cost of goods sold' from the Tax Deducted at Source (TDS) or defining the base amount of withholding tax based on actual earning pattern.
It also suggested inserting a proviso that if the withholding taxes are higher than the actual legitimate tax liability, NBR can exempt the tax to that extent.
The chamber leaders also sought withdrawal of excess perquisites tax.
"As the first step, house rent, conveyance and leave fare assistance should be removed from the definition of perquisites or the limit should be fixed at Tk 1.0 million per annum per person," the FICCI proposed.
The chamber leaders have also demanded withdrawal of the provision for imposing a minimum tax for companies and levy tax on actual taxable income.
Regarding the VAT-related issues, the FICCI has proposed removing the ambiguity on central registration, withdrawing Advance Tax for raw materials and reducing it to 3.0 per cent for other products.
They also sought removal of Supplementary Duty (SD) for all products, except health-hazardous and luxurious ones.
On customs wing, the chamber leaders recommended allowing importers to release goods, in case of disputes, through giving bank guarantees for only the disputed amount.
It also requested the NBR to bring all ancillary items related to capital machinery under the same approval process.
The FICCI demanded that a uniform approval process be introduced in all ports for the import of capital machinery and the time bar for the same be removed.
To eliminate confusions at the customs house, the FICCI proposed introducing a new HS code only for cement manufacturers with the customs duty rate of 5.0 per cent.
The FICCI also sought removal of 10 per cent cap on head offices expenses in the income tax law and simplification of VAT returns forms.