March 29, 2024, 5:04 am


SAM

Published:
2018-04-24 20:20:43 BdST

ICAB suggests gradual cutback on corporate tax


FT ONLINE

Chartered accountants on Monday suggested the government set a national revenue target and distribute it among the tax offices in a logical manner.

The revenue target and distribution of the target at the field-level tax offices should be aligned with economic growth, said the Institute of Chartered Accountants of Bangladesh (ICAB).

The grouping said the illogical and higher projection in revenue collection often causes harassment to the taxpayers.

Former president and taxation committee chairman of the grouping Humayun Kabir recommended this in a pre-budget meeting at the National Board of Revenue (NBR).

Revenue board chairman Mosharraf Hossain Bhuiyan chaired the meeting held in Dhaka.

The Bangladesh Cigarette Manufacturers Association and Printing Industries Association of Bangladesh also attended the meeting and placed their respective budget proposals.

ICAB member Snehasish Barua said the NBR should introduce mandatory crosschecking of audit reports submitted by the company taxpayers along with their income tax returns to prevent submission of fake audit reports.

He recommended that the NBR introduce a provision in the income tax law for mandatory examination of the authenticity of audit reports through communication with the ICAB.

"The ICAB has developed a website where names of auditors and companies are available. Fake audit reports can be cross-checked easily by accessing the site," the ICAB proposal said.

The NBR and the ICAB signed a memorandum of understanding to access the database in a bid to prevent the use of fake audit reports, which results in tax evasion.

While placing the budget proposal for fiscal year 2018-19, the ICAB also proposed making the Finance Bill-induced tax measures effective in a prospective manner instead of the existing retrospective effect.

It said financial implications of change in tax measures should be made transparent by the tax authority to assess gain and loss of revenue collection.

Mr Kabir said the digital market players such as Facebook, youtube do not have permanent offices in Bangladesh to collect due taxes from them.

He said the double-taxation avoidance agreement should be taken into consideration at the time of imposing tax on them.

Responding to the proposal, the NBR chairman said the board was encouraging the digital market players to set up offices in Bangladesh.

"We are not able to tax them directly but taxmen would impose taxes on those giving advertisements on the social media," he said.

In the written proposal, the ICAB demanded an increase of tax-free income ceiling for individual taxpayers to Tk 0.3 million from the current Tk 250,000 to adjust the ceiling with the rate of inflation.

It also sought reduction in corporate income tax rate gradually by 1.0 per cent every year up to next five years from the current 35 per cent for private limited company.

Leaders of the cigarette manufacturers' association proposed the NBR to cut corporate tax rates, withdraw the surcharge, and take measures for checking smuggling.

They said some 80 per cent consumption of cigarettes is on the lower-end while 9.0 per cent on high-end.

The association did not place any formal proposal at the meeting, saying that it will later put forward written proposal to the board.

Golam Mainuddin, chairman of the British American Tobacco Bangladesh (BATB), said the market share of upper segment of cigarettes fell due to the taxation policy of the revenue board.

Responding to the proposals, the NBR chairman said that the cigarette sector is one of the largest revenue generators so stable tax policy would be framed for both protection of the government's revenue and making the product costlier.

He said curbing consumption of cigarette might lead the smokers switch to other addictions such as yaba.

Printing Industries Association demanded imposing customs duty on the import of printed materials mainly text books and the children's books and check the misuse of bonded facility given to local paper and ink industries.

They also sought tax benefit on the import of paper for printing text books claiming that local paper mills make them hostage as the deadline is tight.

Responding to the proposal, NBR chairman said that no printed books would enter the country without duty from the next budget.

BATB Managing Director (MD) Shezad Munim, MD of Dhaka Tobacco Ltd SK Bashir Uddin, chairman of the Printing Industries Association of Bangladesh Tofail Khan, among others, spoke at the meeting.

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