Al Amin :
The domestic economy, employment and export-import have been severely affected by the Covid-19 pandemic. Many people have lost their jobs as several business entities are either shutting down or counting losses.
In this situation, the tough initiative of the National Board of Revenue (NBR) to collect revenue to meet its target has intensified sufferings of the taxpayers, experts and business said.
They said revenue collection target for the current fiscal year needs to be slashed to relief people from the tax burden. In the current fiscal year, the government has set an ambitious revenue collection target (3.3 trillion).
The revenue collection grew by 1.18 per cent year-on-year in July-November period, also reflecting that economic activities have not yet recovered fully from the shock of the pandemic.
The readymade garment sector, which is mostly labour-oriented, has borne the brunt, and many workers in the industry have already lost their jobs, inevitably affecting the income.
Moreover, high rate of tax and VAT are hitting hard the country’s taxpayers amid pandemic.
For an example, rate of corporate tax in Bangladesh is 32 per cent whereas in Singapore it is 24.5 per cent and in USA only 21 per cent. Similarly in Bangladesh manufacturers are paying 15 per cent VAT which is 8-9 per cent in USA and 5-7 per cent in Malaysia. As a result, the people feel discouraged to pay the taxes.
The corporate income tax is to be paid based on companies’ financial performance, though most sectors have been battered by the ongoing pandemic.
Abul Kasem, Chairperson, Business Initiative Leading Development (BUILD, told The New Nation on Sunday, “Country’s tax rate is not competitive as it is comparatively higher. It is not business friendly at all.”
“The tax rate should be tolerable and business friendly, especially in the pandemic time. We are negotiating with the government regarding this issue. Hopefully, the government will consider it,” he said.
The government should have concentrate on the issue how to increase tax net by reducing tax rate, he opined.
Kasem, also former president of the DCCI, further said, “Taxpayers are being harassed by the audit firms. It must be stopped by bringing the farms in transparent system.”
Besides, the country’s Value-Added Tax (VAT) system is very complicated and its collection procedure is sub-standard. It should be made easy for doing business, he added.
Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), said that the corporate tax rate was reduced to 32.5 per cent from 35 per cent in the last budget session, which is not sufficient and it should be below 25 per cent.
“Besides, the country’s VAT system is almost a burden for the domestic consumers. It should be reformed sooner,” he added.
When asked whether there is any scope to bring changes in tax policy, he said, “Usually, a policy is taken for a long period. So, there is no scope to bring changes in the policy right now. Here, the government can take initiatives to give income support to the victims.”
Dr Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD), suggested revising of the revenue collection target in a realistic way as it is an ambitious one.
“Budget deficit likely to go up by Tk around 1 trillion this year, but we support the deficit if resources are spent on vulnerable group feeding or annual development programme targeting income-generating activities in this pandemic situation,” she added.
The government is giving VAT exemption for few sectors including electronic goods and motorbike manufacturing, bread productions, agriculture machinery productions, showroom rent operated by women entrepreneurs.
VAT exemption facility is usually given for a particular period to promote a specific sector or keep the product prices affordable.
