The Dhaka Chamber of Commerce and Industry (DCCI) yesterday urged the government to expand the tax net and make the tax payment processes easy to bring in transparency.

The existing tax policies are complicated, as the same body --National Board of Revenue (NBR) -- formulates policies, collects tax and also hears the related appeals, the chamber said in its proposals for the upcoming budget for the fiscal year of2011-2012.

"As a result, people face troubles while paying taxes. The policy formulating body should be separated from the tax collectors to ease the taxation system and ensure transparency," said Asif Ibrahim, president of DCCI, at a pre-budget press conference at the chamber office in the city.

In a country of 16 crore people, only 30 lakh hold the Tax Identification Number (TIN), and of them, the real number of taxpayers is below 10 lakh, which is ridiculous, said Ibrahim.

"We want expansion of the tax

net and also increased tax-GDP ratio," the DCCI chief said.

The DCCI has already submitted 22 recommendations on income tax, 17 on imports and supplementary duties and 25 recommendations on value added tax to the NBR for the next fiscal year, Ibrahim said.

Among those recommendations, the chamber proposed the

government should reset the ceiling of tax-free income at Tk 225,000 for 2011-12 from an existing Tk 165,000.

The DCCI also proposed tax reduction for the listed companies to 20 percent from the existing 27.5 percent and for raising that for the banking sector and other financial institutions at 40 percent from the

existing 42.5 percent.

Ibrahim proposed the government should reduce corporate tax of cell phone companies to 42.5 percent from existing 45 percent and in case of listed mobile companies the tax should be 32.5 percent from existing 35 percent.

The rationale of reduction of corporate taxes of the

cellphone companies is that those companies are contributing significantly to the development of communication and in technologies.

"Also, more and more foreign direct investment will come in the telecom sector if the tax is lowered," he said.

Ibrahim also proposed that the government should extend the tax-holiday period up to 2015, as a measure of luring investment in different industrial sectors.

DCCI proposed zero duty on import of capital machinery, 12 percent on intermediary goods and 25 percent on import of finished goods as measures to protect the local industries and help them flourish.

He recommended the government withdraw duty on import of LPG mixture, cylinder, bulb and regulator to expedite use of LPG gas instead of burning the already meagre natural gas.

DCCI president suggested that the government should go for withdrawal of the existing price declaration system under the VAT regime and introduce VAT on sales value of goods.