Leading businessmen of the country yesterday called for raising the minimum taxable income to Tk 75.000 from Tk 50 OOO
The business leaders, in separate pre-budget interviews with The Dally Star * suggested that the budget should waive income tax tn the expon sector reduce duty and tariff on imported industrial Inputs and reduce VAT rate to 10 per cent from 15 per cent.
The call was made by Prest dents of the Federation of Bangladesh Chambers of Com merce and Industry (FBCCII Mahbubur Rahman Metropoll tan Chamber ot Commerce and Industry (MCC1) Latifur Rah man Dhaka Chamber of Com merce and Industry (DCCI) Abdur Rab Chowdhury and Bangladesh Garments Manufac turers and Exporters Assorts tlon (BGMEA) Red wan Ahmed MP
BCC1 chief Mahbubur Rah man suggested keeping the difference between the rates of duty on finished goods and raw materials at 30 per cent
In support of this view. MCCI chief Latifur Rahman said Our Industries are still largely dependent on Imported raw materials If duty and tariff on Imported Industrial raw materials are not reduced as against those of similar fin ished Imported goods the Io cal industries will be affected
Regarding income tax DCCI President Abdur Rab Chowd hury strongly suggested that all government officials must pav Income tax like others in the country to Increase govern ment revenue He said that the Ershad regime exempted offl dais from paying Income tax "to keep the bureaucracy un der control "
BGMEA chief Redwan Ahmed suggested exemption
of the garments sector from paying excise tax. VAT and sales tax to make the ready made .garments export more competitive "Also, net income from export may be made 1 (X) per cent Income tax deductible. This will provide In centive to the exporters.” he said
Regarding the raising of the minimum taxable income. Latifur Rahman said. This might help Increase consumption In the country as people will have more savings Increased consumption will Increase gov ernment revenue through VAT and other taxes ’
About the procedure of col lecting corporate tax Abdur Rob Chowdhury said the gov eminent will have to collect taxes on the basis of coneoil dated balance sheet from those entrepreneurs who have more than one Industrial units Elaborating on the point, he said it has been found that a number of entrepreneurs have both loss and profit making units. The government collects income tax only on the basis of incomes from the profit-making units, although the entrepreneurs have to subsidise the loss-making units from the income of the profitable ones, he said. Only a consolidated balance sheet of all the units can ensure justice in this regard, he added.
On VAT, Mahbubur Rahman said the present rate of 15 per cent should be reduced to 10 per cent to check corruption and evasion of tax. The area of imposing VAT should not be expanded further in the present situation ’of the economy, he added.
In support of this view. Latlfur Rahman pointed out that 5 , per cent decrease of VAT rate would reduce the price of goods which would result In bette? consumption of commodities. To make the country’s exports more cost effective. Redwan Ahmed suggested that all types of VAT have to be waived from export oriented industries.
Redwan and Mahbub both suggested withdrawal of VAT on electricity and telephone' for the 100 per cent export-oriented. industries. Redwan further said. There should not be any tax or duty on the Import of capital machinery. Although decision had been given to withdraw this types of duty or tax but unfortunately ■the decision has not yet been Implemented."
The system of deducting one per cent income tax at sourpe should be removed. Abdur Rab said adding , that different types of sureharges should be withdrawn to reduce the existing tax jjurden on the people.
Regarding the Investment scenario. Latlfur Rahman described the macro economic situation as positive. The foreign exchange reserve has been formidable for the last three years, which has helped making Taka convertible. Besides. the government has been contributing some 35 per cent resources to the ADP which was less than 5 per cent four years ago and inflation rate has been brought under control," he,said.
Expressing the hope that the budget would continue to support such Investment climate. he said,"such trends and factors are giving advantages for Investment. This is the right time for investment."
"But unfortunately, the existing political impasse is discouraging Investors. We must have to remove the political impasse to encourage investment. this is as Important as a budget favourable for investment." he added.
Redwan said. To encourage both domestic and foreign investment In setting up back ward linkage industries, the ensuing budget should have clear declaration about the non-existence of any income tax on all direct and deemed export for the next 20 years."
Redwan further suggested that a separate export bank be established, the Interest on lending be /educed and duty on import rf raw cotton dyes and chemicals be withdrawn.