Economists, financial experts for further reducing corporate tax rate

Economists and financial sector experts have demanded of the government to further reducing the corporate tax rate and thus widening the tax net in order to improve the investment-friendly environment of the country.

They also suggested for identifying newer sectors for realizing tax, collecting revenues through automated method and thus making the tax collection method more taxpayer friendly to boost revenue generation.

They made the proposals at a pre-budget meeting with the National Board of Revenue (NBR) held at the conference room of NBR Building in the city's Segunbagicha area today.

Presided over by NBR member (customs policy) M Masud Sadique, representatives from Policy Research Institute (PRI), Centre for Policy Dialogue (CPD), Bangladesh Economic Association (BEA), Bangladesh Institute of Development Studies (BIDS), UK based PWC, and audit firm Snehasish and Mahmud Company Ltd took part in the discussion meeting.

Taking part in the discussion, PRI executive director and eminent economist Ahsan H Mansur said that Bangladesh would soon graduate from the LDC status to a developing country. "But, after graduation from the LDCs, we'll loose many facilities in exports. During this period, we'll have to keep alive our businessmen through giving tax facilities. We'll have to take preparations from now on to face this challenge,"

He also cited that the corporate tax rate is higher in Bangladesh compared to other countries of the world for which investment-friendly environment should have to be created through enhancing competitive edge and reducing the corporate tax rate.

The corporate tax rate in the country is now 30 per cent after it was reduced by 5 per cent over the last two budgets. However, the corporate tax rate for the listed companies is 22.50 per cent. The corporate tax rates in China, India and Vietnam is even below 15 per cent in some cases.

Mentioning that the tax GDP ratio of the country is still below 10 per cent, Mansur said that Bangladesh is still lagging behind in tax GDP ratio compared to other countries of the world.

"So, we'll have to widen the tax net to increase revenue generation. In such case, the tax rate can be reduced. Recently, we've gained experience through reducing tax rate. But, our revenue generation has not reduced, rather it has increased," he added.

Suggesting the revenue board to make automation in the tax collection method, the eminent economist noted that the gap between tax collectors and taxpayers should have to be bridged so that the taxpayers do not feel discouraged in paying tax.

Rather, he said if the taxpayers can pay taxes from their respective positions, then the taxpayers would feel more motivated in paying taxes. Dr Ahsan also stressed the need for appointing manpower in proper areas of the revenue generation system.

Former general secretary of BEA Jamal Uddin Ahmed suggested for realizing license renewal fees and turnover tax from the pharmaceuticals companies of the country.

Mentioning that the tax rate on the international consultant firms is 43.7 percent in Bangladesh, PWC Managing Partner Mamun Rashid proposed for reducing such tax rate.

Snehasish Mahmud Company Managing Partner Snehasish Barua suggested for making mandatory submission of the TINs with the holding tax in the city Corporation areas.

CPD representative Syed Yusuf Sadat proposed for imposing Taka 10 tax on each cigarette stick to discourage the smokers. BEA general secretary Ainul Islam, NBR member Zakia Sultana and Shamsuddin Ahmed, among others, took part in the pre budget discussion.