The Foreign Investor’s Chamber of Commerce and Industry (FICCI) has expressed some concerns about the proposed national budget for the fiscal year 2022-23 along with its probable implication for the business and foreign investments in Bangladesh. At a media briefing held in a city hotel on Wednesday, a potentially business-friendly budget will unravel the benefits unless some of the provisions such as Workers’ Profit Participation Fund (WPPF) are reversed. FICCI President and Chief Executive Officer (CEO) OF Standard Chartered Bank Naser Ezaz Bijoy presided over the event. Among others, Rupali Chowdhury, Advisor, FICCI Advisory committee and Managing Director, Berger Paints; Zaved Akhtar, Director, FICCI, Managing Director & CEO, Unilever Bangladesh Ltd.; Shehzad Munim, advisor, FICCI advisory panel and MD, British American Tobacco Bangladesh Co. Ltd; Deepal Abeywickrema, Director, FICCI & Chairman, FICCI Tariff, Taxation and Regulatory Affairs Committee and Managing Director, Nestle Bangladesh Ltd.; Sazzad Rahim Chowdhury, Coordinator- Tariff, Taxation and Regulatory Affairs Committee and CFO, Berger Paints Bangladesh Ltd were present in the event. The programme was hosted by Executive Director of FICCI.T. I. M. Nurul Kabir. The proposed Finance Bill incorporated a provision by which a company will have to pay tax on its contribution to the Workers’ Profit Participation Fund (WPPF), which will ultimately increase the income tax burden of the companies and similarly increase the effective tax rate, said the chamber body. It said contribution to WPPF has been proposed as inadmissible expenses based on the idea that it is an apportionment of profit from after-tax profit like a dividend, while the fact is, it is a statutory payment for the benefit of the employees, which is paid from pre-tax profit as per the law. Read: Budget FY23: Lower allocation for key mega projects worries FICCI FICCI has also recommended a few changes to the Conditional Reduction of the Corporate Tax Reduction by 2.5%. As per the Finance Bill 2022, certain types of listed companies that have issued more than 10% of their shares through IPO will be able to enjoy the reduced tax rate. FICCI proposes that this provision should be amended by clearly mentioning at least 10% shares of a listed company must be held by the public in order to avail of such a reduced rate. Conditional Reduction of the Corporate Tax Reduction by 2.5% also mentioned that all receipts must be collected through banking channels. FICCI proposes that this provision should be amended and the law should allow at least 50% of the proceeds to be collected through banking channels to avail such a reduced tax rate. From next year the ceiling can be gradually increased by 10%. On the same it says, all investments and expenses in excess of Tk. 12 lac must be paid through the banking channels. FICCI proposes that section 30 of the ITO, 1984 should be amended to remove the contradiction and NBR should allow at least 10% of the expenses of corporate to be paid through the non-banking channel to avail such a reduced tax rate.
Transparency International Bangladesh (TIB) has urged the government to withdraw the proposed budgetary provision of allowing launderers to legalise their undeclared money, saying such provision will discourage genuine taxpayers. It is immoral, discriminatory and conflicts with the existing laws to allow legalising laundered money from abroad without questioning, announced in the national budget for FY2022-23, the graft watchdog body said in a statement on Friday. Also read: Law bars asking questions about laundered money: Finance Minister But, according to the Money Laundering Prevention Act, 2012 and the relevant international law, money laundering is a serious crime and such provision will encourage money laundering and corruption in general, said TIB Executive Director Iftekharuzzaman. It is expected this provision will increase the foreign exchange flow and income tax revenue through the integration of money and assets earned abroad into the mainstream of the country's economy, he said. “But our past experience has shown that despite repeated opportunities to whiten black money in the country's economy, it has not yielded the expected results, nor has the government received the desired revenue.” It is impossible to bring back this laundered money or assets without a legal assistance agreement of our country with the authorities concerned in the country where the money is laundered, said Iftekharuzzaman. Besides, for those who are genuine taxpayers, the provision is blatantly discriminatory, as they pay at least three times the tax rate of 7 percent. This is discrimination and against the principles of the constitution, he added. In the proposed budget, the finance minister acknowledged the existing economic crises such as inflation, holding the value of the Taka against the dollar, increasing import costs and declining foreign exchange reserves, but could not provide effective strategies or guidelines to address them, he said. Also read: Budget FY23: Laundered money to be legalized by 7-15 pc tax The TIB executive director said although there is an expectation to expand social security programmes to reduce inflationary pressures on marginalised and low-income people, the proposed budget does not show much. “Rather, it has been shown to include government employees' pensions, interest on savings certificates, and loan waivers that were provided during Covid pandemic in order to maximize spending on the social security sector, which are not part of the Social Security programme."
The civil society representatives Wednesday demanded the direct inclusion of income taxpayers into the universal pension scheme (UPS), which is expected to be announced in the national budget for the fiscal year 2022-23. They also urged the government to take everyone's opinion into account to design an effective and sustainable scheme at a pre-budget seminar organised by COAST Foundation in Dhaka. Ahsanul Karim, assistant director at COAST Trust, said constitutionally Bangladesh is a welfare state but the approach of the UPS is somehow a commercial instead of being a rights-based one. The income taxpayers will have to be included directly into the UPS as they are key resource mobilisers to develop the country and have the right to get the benefit, he said. Barrister Shamim Haider MP said the proposed UPS is like an investment instrument that needs to be revised for shaping an institutional framework to serve everyone based on their economic status. "The change has to be made before submitting it to the cabinet." READ: Special allocation in budget required for SW coastal districts: Civil society leaders COAST Foundation Chairman Dr Tofail Ahmed said the UPS is now one of the options that can benefit the people who pay taxes directly and indirectly. He recommended bringing the "zakat fund" under a regulatory framework in mobilising substantial resources for UPS through paying tax incentives. Palli Karma Sahayak Foundation (PKSF) Chairman Dr Quazi Kholiquzzaman Ahmad said: "Poor people must be supported through the pension scheme. So, make the pension scheme people-focused within the quickest time," he said.
At least half the country’s TIN holders are likely to miss the November 30 deadline to submit their tax returns amid experts’ call to the National Board of Revenue (NBR) to go for a more bold and people-friendly tax collection campaign. Speaking on condition of anonymity a senior NBR official told UNB that the pace of manually submitted returns has been slow. He said he can’t disclose how many people submitted their returns manually until November 27, 2021. He, however, said some 33,653 taxpayers submitted their tax returns until Saturday (November 27) using the newly-launched eReturn system and a total of 71,500 taxpayers have registered digitally. Read: People’s interest in paying tax is growing in Bangladesh: Finance Minister The digital system ensured that there is no harassment, no bribe or no delay in issuing acknowledgement of tax certificates. A team of tax officials developed the system using the board's own resources. “The returns submission will take place on the last two days of November as usual like previous years and the number may not be less than the last year,” the official added. Some regular taxpayers complained that they did not get timely messages from NBR. Talking to UNB Abbas Uddin, a college teacher said, “I have been paying taxes for the past 11 years. I did not get any message from NBR.” When told of this complaint NBR member (tax policy) Md. Alamgir Hossain said that tax commissioner offices are organizing digital campaign in areas by sending SMS to the taxpayers Besides, NBR is using several media outlets to send out the information about tax return submissions, he said. He advised people to submit returns within the deadline otherwise they would have to explain the delay to the NBR through applications and pay extra fees for late submissions.
Transparency International Bangladesh (TIB), the corruption watchdog, has cautiously welcomed the government's decision to discard the provision of whitening black money in the proposed budget for the next fiscal (2021-22). Besides, the TIB is also drawing attention to the fact that this discriminatory and unconstitutional benefit should not be included in any other way out of respect to the honest taxpayers. Also read: Provision for black money whitening to continue: Finance Minister The TIB has expressed concern over the lack of a clear roadmap to ensure transparency and prevention of corruption in the overall budget implementation, not just the increase in allocations to critical sectors such as the health sector to control Covid. TIB Executive Director Dr Iftekharuzzaman in a statement on Thursday night said despite strong objections and protests from all quarters, Finance Minister AHM Mustafa Kamal allowed whitening black money in the outgoing budget. Also read: Black money: CPD for breaking vicious circle of illicit income “The decision of the finance minister not to renew the whitening of black money in the proposed budget for the next fiscal year can be taken as a realization of the government," he said. The TIB Executive Director said they want to believe that the authorities will not continue this unethical benefit under the pressure of vested interests again in future, while respecting the Prime Minister's dictum of 'zero tolerance against corruption'.
People need to change their mindset on paying taxes for sustaining the inclusive development of the country, Salman F Rahman, private industry and investment advisor to the prime minister, said.
Prime Minister's Private Industry and Investment Adviser Salman Fazlur Rahman on Saturday said the government is working on policy reforms, aiming to attract more foreign direct investment (FDI).
The government has decided to change the tax-free threshold of income, tax rates and tax slabs for taxpayers other than companies and local authorities, especially individual taxpayers.