The Foreign Investors’ Chamber of Commerce and Industry (FICCI) today urged the government to reduce the effective tax rate in line with the tax rates in neighboring countries.
FICCI delegation, led by its President Naser Ezaz Bijoy, placed their proposals at a pre-budget consultation meeting organized by the National Board of Revenue (NBR).
Members of the FICCI Board of Directors, committee members, and executive director attended the meeting.
NBR Chairman Abu Hena Md. Rahmatul Muneem presided over the meeting while other members and senior officials of the NBR also attended it.
In the consultation meeting, FICCI President proposed for reduction of
effective tax rate.
He said, “The effective tax rate prevailing in our country is extravagant.
Though the applicable corporate tax is 20 percent and 27.5% for the publicly traded and private limited companies respectively, effective tax rate is much higher due to the implication of 30B, 82C (2) and deduction of tax at source.”
Therefore, the FICCI proposed to reduce the effective tax rate in conjunction with the tax rate of our neighboring countries.
The FICCI also recommended for Rationalization of Tax Deduction at Source (TDS). Naser Ezaz stated, “In certain cases, TDS is considered a minimum tax for that source of income. Even though the corporate tax is reduced to 27.5 percent after maintaining certain conditions, still the business is unable to reap the benefits. Therefore, the impact of minimum tax against TDS should be rationalized.”
He suggested using the DVS system to identify income and expenses which can be useful to rationalize TDS and eliminate TDS from the minimum tax provision gradually.
Regarding digitalization and integration, Bijoy appreciated some initiatives taken by NBR to digitalize the regular routine works such as return submission, Acknowledgement, return submission confirmation, A- challan on TDS, etc.
Meantime, he also expressed his concern over the slow digitalization process. He recommended implementing digitalization at all levels to minimize taxpayer’s hassle. For instance, online hearing in assessment, CTA, TAT, ADR.
The FICCI President recommended the development of an automated VAT challan, also known as an e-Invoice or Electronic VAT challan, which must replace the need for a manual tax challan.
Implementation of this system will make it much simpler for taxpayers to conduct business while also making it much simpler to oversee the tax authorities and taxpayers, he added.
Hence, the Issuance of tax invoices (Mushak-6.3) should be automated, and e-Invoice or Electronic VAT challan should be introduced, Bijoy added.