FBCCI seeks changes in tariff, tax provisions
Friday, 25 April 2008

The Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) will submit a 592-point recommendation at a pre-budget meeting Thursday, seeking substantial changes in import tariff, income tax and VAT provisions, reports UNB.

The recommendations in three separate sets will be placed before the government for consideration while preparing the next budget for the fiscal 2008-09.

The apex trade body''s recommendations will be discussed at the 29th pre-budget meeting of the National Consultative Committee of NBR on budget at the Bangladesh-China Friendship Conference Centre.

National Board of Revenue (NBR) and FBCCI jointly organised the consultation, considered the biggest pre-budget meeting, with Finance and Planning Adviser Dr Mirza Azizul Islam as chief guest.

NBR chairman Muhammed Abdul Mazid, senior officials, and FBCCI president Annisul Huq, vice presidents and directors, leaders from important trade bodies, as well as academics, economists and experts are expected to attend the meeting.

In its 340-point recommendation on import tariff, the FBCCI was critical about what it said the ploy of the International Monetary Fund and the World Bank to de-industrialise the economy.

"The existing tariff structure is the customized de-industrialisation and market opening ploy of the World Bank and IMF, thrust upon the victims comprising poor and the least developed countries," the FBCCI observed in its recommendation.

It said the pro-import tariff structure and removal of development surcharge on imports of nearly 2,600 finished and luxury goods have triggered a surge of subsidized imports, forcing the local manufacturing to struggle against cheaper Chinese and Indian products.

The apex trade body will recommend the government to reduce the import duty on industrial raw materials, capital machinery and spare parts to one percent while 10 percent for intermediate goods and 25 percent for the finished products.

It will also suggest imposing specific amount of import duty on essential items and exempt them from mandatory pre-shipment inspection.

The FBCCI will also recommend canceling the mandatory pre-shipment inspection as soon as the cost-raising measure completes its existing period in August this year. It will make a 139-point proposal on individual income tax and corporate income tax at the meeting, urging the government to fix income tax exemption limit to Tk 300,000 while keeping the minimum tax unchanged at Tk 2,000.

It will also urge raising the slabs of taxable income and charge lower tax rate on the slabs, and will demand exempting women entrepreneurs from tax on income up to Tk 350,000 while senior citizens up to Tk 450,000. The Federation will also recommend reducing corporate income tax rate and creating a difference between the rates of listed companies and non-listed companies.

It will also recommend that the corporate tax of commercial undertakings of the NGOs should be 45 percent, but it should be 35 percent if the companies were converted as publicly traded companies and enlisted with the stock exchanges.

"The investments made by NGOs in commercial undertakings shall be deemed as income and shall be taxed accordingly," the FBCCI maintained. It will seek substantial tax holiday measures, including 5 years for RMG units outside EPZs, as the exemption expires in June this year. It will also seek exemption from tax on turnover. Other recommendations will include increasing powers of the Tax Ombudsman, as he could not issue final order.

The apex trade body will suggest simplifying the VAT collection procedure, as they think that the existing procedure was complex and cause harassment. "Price declaration to be submitted only when there is a change in the selling price. Even if the manufacture fails to increase the price in spite of increase in output cost due to market conditions, VAT authority should accept price declaration showing higher input costs," it said.

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