President of Dhaka Chamber of Commerce and Industry (DCCI) Abul Kasem Khan has requested the government to slash corporate tax in all categories at least by 2.5 per cent.
In the proposed budget, the government only reduces 2.5 per cent corporate tax on publicly and non-publicly traded banks, insurance and non-bank financial institutions (NBFIs), drawing criticism from stakeholders, reports UNB.
In his initial reaction to the budgety proposals, Khan said if the government reduced corporate tax rate, the businessmen would be happy and willing to reinvest that money into the business.
"At present private sector investment as a percentage of GDP is 23 per cent but if we want to increase it by even 1 per cent , Taka 2.5 billion needs to be invested in a year. Government has set a target to increase private sector investment to GDP ratio to 25.15 per cent, which will be challenging if corporate tax rate is not cut down," he said.
In the proposed budget, double taxation system on dividend is withdrawn which Abul Kasem Khan hailed.
He also hailed the decision of the government for reducing duty on imports of accessories for locally produced motorcycles, mobile phones and tire tubes.
He said government should increase the budget on railway under ADP which is Tk 111.55 billion, a 3.1 per cent increase over that of last year.
The DCCI chief said budget outlay for railways should be doubled for better communication.
The government has formed a committee named "National Committee for Monitoring and Implementation" to work out how to position Bangladesh in the top 100 of the World Bank's ease of doing business index within the next five years, something Abul Kasem appreciated in his instant reaction.
He proposed inclusion of private sector participants in this committee.
He also proposed not to increase VAT rate this year. He also hails the ADP allocation of Taka 1.73 trillion which increase 16.6 per cent from the revised ADP for the current, outgoing fiscal.
The DCCI president hailed the government for allocating Tk 1 billion for skill development projects.
In this regard he said that tax rebate should be given on the 5 per cent of gross income of a company that is invested in research and development and skill development activities.