• Wednesday, Aug 10, 2022
  • Last Update : 03:54 pm

FBCCI wants taxes on capital machinery scrapped in final budget

  • Published at 01:10 am June 28th, 2019
FBCCI -Courtesy
FBCCI holds a press conference on the proposed budget for 2019-20 fiscal year at a local hotel in the capital on Thursday Courtesy

The apex chamber also urged the government to scrap the absolute authority of value added tax (Vat) officials awarded in the proposed Finance Bill, 2019 on confiscating goods, arresting traders and freezing their bank accounts

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) at a post-budget press conference on Thursday strongly demanded withdrawal of all advance taxes on capital machinery import proposed in the budget for 2019-20 fiscal year.

The apex chamber also urged the government to scrap the absolute authority of value added tax (Vat) officials awarded in the proposed Finance Bill, 2019 on confiscating goods, arresting traders and freezing their bank accounts.

FBCCI President Sheikh Fazle Fahim was speaking at the conference held at a local hotel in the capital. 

Top chambers’ and associations’ leaders, including BGMEA President Rubana Huq, Dhaka Chamber of Commerce and Industry President Osama Taseer, Association of Bankers, Bangladesh Chairman Syed Mahbubur  Rahman were present, among others.

Fahim urged the government not to harass businesspeople in the name of collecting tax or VAT.

“They (revenue authorities) must inform chamber or association concerned before taking any final action,” Fahim told the briefing.

He reminded that the Finance Minister AHM Mustafa Kamal had repeatedly assured them of not increasing any taxes in the budget at different pre-budget meetings and seminars.

“We urge reconsidering the areas where deviation from earlier pledges of finance minister took place (due to increase in proposed taxes), ” Fahim said.

In the draft budget, 5% advance tax (AT) and another 5% advance income tax (AIT) were proposed on import of capital machinery. The budget also proposed 5% AIT on import of raw materials.

FBCCI in their proposals demanded lowering the VAT rate to 5% from the proposed 7.5% for procurement providers, increasing the yearly turnover limit for AIT deduction from the proposed Tk1 crore to Tk3 crore, and lowering the corporation tax by 2.5% from the existing level.

In the proposals, the apex chamber sought the similar and reduced corporate tax rate being enjoyed by readymade garment industry for all other export-oriented sectors.

The FBCCI president said the proposed budget increased the AIT from 3% to 10% while disbursing cash incentive in favour of exporters.

“We urge the government to keep the AIT rate unchanged at 3%,” Fahim demanded.

Furthermore, the apex chamber urged the government to withdraw the proposed 15% tax on both retained earnings and stock dividend of listed firms.

Terming the proposed fees for trade licence renewal abnormal, Fahim recommended increasing the rate in conformity with the inflation since 2012.

The FBCCI president appealed to the government to reduce the AIT to 0.25% from the proposed 0.6% from the export receipts.

The press conference also urged the government to establish a regulatory framework in the country.

Rubana Huq said: “Our members are being harassed in many ways as their factories and office establishments are being searched by revenue officials without any notices. I requested the National Board of Revenue chairman to give me the list of noncompliant businesses so that we can take actions."

“But before notifying us, if the authorities harass us through raiding our factories, it becomes a trouble for the industry people," she added. 

Rubana urged the government to eliminate complexities as regards cash incentives.

“Many exporters, especially small and medium ones, are not getting the incentives for the technical complexities and confusions over language of the laws on incentive,” she claimed.

Rubana criticized the budgetary move that proposed hike of AIT on incentive.

“If you (the government) help us with the incentive, why then has tax been increased on incentive in the budget,” she asked, noting that the measure was totally irrational.

Shafiul Islam Mohiuddin, former president of FBCCI, said: “We want to do business without being harassed.”

“It is not acceptable to give VAT officials absolute power, as the practice may demotivate honest businesspeople," he added.

He, however, said that the proposed budget got both good and worst things.

He categorically criticized the tax hike on trade license renewal in the budget.

Bangladesh Chamber of Industries (BCI) President Anwar-ul Alam Chowdhury (Parvez) said the regulatory power proposed for the VAT officials should be withdrawn.

Plastic manufacturers opposed customs duty hike on raw material to 25% from the existing 5%.

Jashim Uddin, president of Bangladesh Plastic Goods Manufacturers and Exporters Association, said the government was providing huge facilities for apparel sectors but plastic and other sectors were not considered.

“The government should treat all the export-oriented sectors equally,” he suggested.

Syed Mahbubur Rahman demanded reducing the proposed duty on import of bank-cards, defining wilful and habitual defaulters, establishing a vibrant bond market and formation of a bank commission.

Rahman said the commission would bring discipline in the banking sector.