Raise tax-free income ceiling

May 14, 2009

Businessmen yesterday urged the government to fix the revenue earnings target at Tk 55,000 crore and raise the ceiling of the tax-free income in the national budget for fiscal 2009-10. They demanded establishment of a fund for mitigating the effects of financial crisis. They also demanded special economic zones (SEZs) for local investors, punitive measures against the errant reports of the pre-shipment inspection (PSI) companies, reforms to key government offices, single digit bank interest rate and lowering import duties.

The proposals came from the business community at a pre-budget consultative meeting at Dhaka Sheraton Hotel where Finance Minister AMA Muhith was the chief guest.

Chaired by Annisul Huq, the president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the meeting was attended among others by Dr Nasiruddin Ahmed, acting chairman of the National Board of Revenue.

The meeting was jointly organised by FBCCI and NBR to elicit opinions from leading businessmen and chamber leaders from across the country on what they want in the next national budget.

Huq proposed the government keep the target of revenue collection at Tk 55,000 crore, estimating the GDP growth at six percent.

The FBCCI sought that the threshold of tax-free personal income be raised to Tk 200,000 from the existing Tk 165,000 in FY 2009-10 budget.

Huq proposed 10 percent tax on Tk 3,50,000 income, 15 percent on Tk 4,50,000, 20 percent on Tk 6,00,000 and 25 percent on the amounts above.

The limit of tax-free income should be Tk 3,60,000 and Tk 4,50,000 for female taxpayers and senior citizens and the disabled respectively from its existing Tk 1,80,000 annually.

The FBCCI proposed reduction in import duty on capital machinery to 1 percent.

The apex trade body also proposed that the government fix import duty at 5 percent for intermediary goods, 12 percent for essential commodities and 25 percent for luxury items.

Huq urged the government for a major reform in the Board of Investment (BoI) as the activities of this investment promotional body are not up to the mark to attract both local and international entrepreneurs.

Complaining about the losses they faced because of the PSI firms’ errant reports, a section of businessmen demanded the abolition of these pre-shipment inspection companies.

Samson H Chowdhury, chairman of Square Group, a leading industrial conglomerate, asked the government for removal of the anomalies in payment in advanced income tax (AIT) and to stop harassment in importing pharmaceuticals raw materials, including packaging items.

Shafiul Islam Mohiuddin, vice-president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), demanded immediate improvement in the law and order and power situation for the sake of survival of the garment sector, the highest foreign exchange earner.

Abdul Hafiz Chaudhury, president of the Metropolitan Chamber of Commerce and Industry (MCCI), urged the government to reduce corporate tax in the next budget.

Tanveerul Hoque Probal, president of the Real Estate and Housing Association of Bangladesh (REHAB) demanded that the complicated system of advanced income tax should go.

The finance minister made an assurance that rural economy and light engineering would get due importance in the upcoming budget, as small and medium enterprises (SMEs) are the main sector for employment generation for the youth.

He said the economy would get a fresh boost from the third quarter of the next fiscal year as the global situation is improving.

“The GDP growth might be below 6 percent in the next year, but such growth is expected to reach 8 percent before handover of the power after the expiry of the tenure of the incumbent government,” Muhith said.

Raise tax-free income ceiling

Comments