Dhaka: Country’s apex trade body suggested casting wide the income-tax net cutting down the tax rates in the upcoming national budget as they think this horizontal growth would boost revenue earnings while reduce the tax-loads on the businesspeople.

The taxation proposal came through recommendations submitted to Finance Minister Abul Maal Abdul Muhith by the Federation of Bangladesh Chambers of Commerce and Industry, ahead of the budget placing in parliament early next month.  

Organization sources said the recommendations, placed last Tuesday, forecast that the quantum of revenue earnings would increase to some extent if the scope of taxation is widened—meaning that potential new taxpayers would have to be brought onto the tax net.

“The businessmen are also ready to extend their cooperation to the government in this regard,” said one FBCCI executive.

Putting emphasis on expansion of the activities of the Revenue Department to different growth centres at upazila level in increasing tax realization, the FBCCI also said local businessmen would help the revenue department in this regard, if necessary.

It also recommended fixing Tk  2,000 or Tk 4,000 as tax rate for common businessmen for increasing the rate of realization and minimum tax for the lawyers and physicians at Tk 3,000 from Tk 2,000.

According to the trade body, the business organizations are reluctant to pay tax as the corporate tax rate is much higher, intensifying the tendency of evading tax.

The federation advocated for bringing down the tax rate by 25 percent for listed companies while 30 percent for non-enlisted companies and by 40 percent for bank-insurance-financial institutions and mobile companies, and by 2.30 percent for manufacturing sector.

FBCCI informed that there are some 22.38 lakh TIN (Tax Identification Number) holders in the country, two-thirds of whom neither pay tax to the government nor submit their tax returns.
   
The proposed budget by FBCCI also calls for the government to bring all the high-ups, including the President, the Prime Minister and MPS, onto the tax net.

MRH/LY/MUA

BDST: 1555 hrs, 15 April 2010