The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has demanded the withdrawal of advance taxes (AT) at the import level for the upcoming budget of FY2023-24.
The apex trade body demanded it in a written pre-budget proposal to the National Board of Revenue (NBR) saying the post-production adjustment chain has broken down due to the inability to adjust advance tax and the non-collection of VAT (value-added tax) deducted at source.
The letter also stated that the industrialization process is encountering unneeded obstacles at the same time that capital liabilities are rising, and business expenses, time, and inconveniences are also on the rise.
The advanced tax system, which imposes a 4% AT on the import price, was established at the import level when the government enacted the new VAT Act in 2019.
It was previously enacted as advance trade VAT or ATV. It is being assessed as AT because the new law lacks a provision of this nature.
Businesses said that the importers cannot adjust this AT by complying with the current requirements though there is a scope for this AT to be adjusted later.
Moreover, a significant proportion of working capital is getting stuck as a result. Businessmen have long voiced their concerns about this matter.
Regarding the upcoming budget, the NBR has continued its conversations with stakeholders, and with a formal consultative meeting with the FBCCI, the negotiations will be formally wrapped up for this year.
FBCCI also made some other proposals, including bringing companies with a turnover above the prescribed limit under the Large Taxpayer Unit (LTU-Vat) office to the meeting.