Demand for lower rate and expansion of tax-net makes sense

BUSINESS leader’s call to the government to expand tax-net instead of imposing heavy tax on large tax-payers to attain the revenue targets is a highly sensible proposition. At a pre-budget meeting with National Board of Revenue (NBR) leaders of Metropolitan Chamber of Commerce and Industry and Bangladesh Chamber of Industries drew the attention of revenue authorities to the fact that big taxpayers are facing the brunt of unusual pressure whenever the tax authority faces revenue shortfall and take steps to achieve the target. They suggested with good logic and fair justification that instead of pinching existing tax-payers with additional load, the government should expand tax-net and reduce tax-payers’ harassment, corruption and budgetary waste to bring qualitative improvement in the Revenue Administration.

Their suggestion for lower tax incidence to help to bring about higher investment in the economy when investment sluggishness remains the biggest challenge so far to accelerate the pace of growth also deserve highest consideration. It is important to attain the middle income status for the nation by 2021.
 
The meeting on Wednesday also suggested that the government should improve business friendly environment by improving tax collection system and increasing efficiency in government offices at every level reducing regulatory impediments and infrastructure shortfall. Gas, electricity and other utilities must be quickly available. Their call for an upward adjustment of tax-free limit for individual tax-payers taking into considering inflation the higher cost of living also makes sense. As the 80 percent of the large tax-payers are members of the Chamber bodies, they demanded that taxmen should be stripped of their excess power they are using now to harass businesses to make individual fortune instead of using the power for the benefit of the government.

They have also demanded rationalizing customs duty and reducing disparity on duty structure between imported and local goods. Their suggestion to cut tax on service providers of new technology, tax waiver on excess perquisite, lower tax on import of raw materials, reintroducing investment rebate, downward adjustment of higher tax, abolition of current-account system in new VAT regime are some other important issues that the business leaders have rightly called for positive consideration.

The suggestion by BCI for raising VAT-free ceiling of annual turnover tax makes sense. We also believe its proposal for lowering rebate on corporate tax for publicly listed banks and insurance companies and financial institutions, mobile operators, merchant banks and for non-publicly listed company deserve consideration.

The NBR Chief’s observation that the government is planning to expand tax-net down to union level to develop a tax culture is a good step but measures should also be at work how to save people from harassment. We agree with business leaders that the tax system must be inclusive at lower rates and be hassle free. This is important for the economy to see higher investment and achieve higher growth.