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Continue tax holiday, cut corporate tax MCCI urges NBR

Star Business Report
Metropolitan Chamber of Commerce and Industry (MCCI) yesterday recommended that the National Board of Revenue (NBR) continue tax holiday facility and reduce corporate tax rate for non-listed companies to 35 percent in the next budget for fiscalyear 2008-09.
MCCI leaders led by its President Latifur Rahman made the recommendations at a meeting with NBR Chairman Abdul Mazid at the latter's office.
The chamber said income tax for banks, insurance companies and other financial institutions, which was raised to 45 percent in 2003, is unfair. “We feel that there is no justification for treating financial institutions differently. There is no such differential treatment in other countries in the subregion," Latifur Rahman said.
He also said tax on dividend should be reduced to 10 percent, which is now 10 percent for individuals and 15 percent for companies.
The MCCI also recommended reduction in customs duty on capital machinery and intermediary goods in the upcoming budget.
The chamber said the supplementary duty on raw materials and components should be eased to make local industries competitive.
For the greater development of industrial sector, flow of technical know-how and technical assistance is indispensable, Latifur Rahman said. However, the situation has been vitiated by limiting royalty and technical fee to 5 percent of profit, he added.
Linking technical fee with profit is not only impractical, it also contradicts the Foreign Exchange Regulation Act and the Board of Investment's guidelines that link technical fee with sales, he said.
Accordingly, to help flow technical know-how and technical assistance, the fee should be linked to sales and the rate should be 6 percent as provided in the Foreign Exchange Regulations and the investment guidelines of the Bol, he suggested.
The chamber president said, "The confusion with regard to completely built up (CBU) and completely knocked down (CKD) should be removed so that the government's revenue does not suffer and at the same time, the local assembling industries can grow."
He suggested withdrawal of discretionary powers of the tax officials as such powers militate against revenue collection and also cause harassments to the taxpayers.
The exemption limit for individual taxpayers, which is now Tk 1,50,000, should be raised toTk2,00,000 in viewof the spiralling cost of living, Latifur Rahman said.
The government's budget has a major role in providing policy support to the productive sectors, he said.
"We strongly feel that while all-out attention should be given to the agriculture sector, the next budget should provide fiscal concessions to the industrial sector."