DCCI proposes raising tax-free income limit to Tk5 lakh

The Dhaka Chamber of Commerce and Industry (DCCI) has proposed raising the tax-free income limit to Tk5 lakh and increasing the maximum tax rate to 25%.

The chamber has also proposed phased abolition of advance tax for manufacturers at the import stage and reduction of advance tax for commercial importers.

The organisation made these proposals during a pre-budget discussion at the National Board of Revenue (NBR) held at NBR conference room at Agargaon in the capital on Tuesday.

During the discussion, DCCI President Taskin Ahmed presented 42 budget recommendations to NBR Chairman Md Abdur Rahman Khan.

The proposals focus on expanding the tax net, reducing tax rates, implementing business-friendly policies, reforming the VAT system, protecting local industries, simplifying customs duties and tariffs, and easing individual tax structures.

Ahmed further highlighted discrepancies between customs tariff valuations and market prices, which force businesses to pay excessive duties. To address this, he suggested imposing specific duties instead of tariff value-based assessments.

Other proposals of the organisation include the introduction of automated corporate tax returns, withdrawal of the obligation to collect Proof of Submission of Returns (PSR) from businessmen, digitise the VAT system, create a mobile app along with the website and make it mandatory for businessmen, and make the single tax rate or VAT rate 10%.

Taskeen Ahmed said, “As there is no automated system for filing corporate tax returns, corporate entities submit returns manually. Manual or handwritten returns are time-consuming, complex and error-prone. Pointing out these, it is necessary to quickly introduce automated corporate tax returns for corporate entities.”

NBR Chairman Md Abdur Rahman Khan said, “Individual tax should be higher, while corporate tax should be lower. This time, the individual tax rate will be 30 percent, but it should be increased further. It is higher in India, and in developed countries, it ranges from 50 to 55 percent. Reducing it would not be appropriate; instead, it should be increased. Otherwise, inequality will not decrease.”

“In developed countries, inequality is less because individual taxes are higher. It is true that they get more services by paying more taxes. We also have to ensure services. Then people will keep less money in their hands,” he also said.

NBR Chairman Md Abdur Rahman Khan reiterated NBR’s commitment to reforming trade-related revenue policies to facilitate business and investment. He stressed the need to expand the tax net, ensuring fairness in tax compliance.

He acknowledged that while the number of TIN holders has exceeded 10 million in the past decade, tax return submissions remain disappointingly low.

Khan also said that NBR is working towards fully online corporate tax submission and believes lowering corporate tax rates will encourage proprietorship businesses to transition into corporate entities.

To improve VAT administration, NBR is prepared to develop software with local IT experts, seeking business community support.

DCCI Senior Vice President Rajib H Chowdhury, Vice President Md Salim Sulaiman, and senior NBR officials attended the discussion.