President of Dhaka Chamber of Commerce and Industry (DCCI) Ashraf Ahmed called on the Chairman of National Board of Revenue (NBR) Md Abdur Rahman Khan at his NBR head office at Agargaon on Tuesday.
During the meeting, Dhaka Chamber President Ashraf Ahmed said that the complicated tax management system hinders CMSMEs' businesses. He suggested easing and formulating a CMSME-friendly tax structure, according to a press release.
He said that, under the existing law, if business losses cannot be offset by income from other sources within the venture, an additional tax burden is imposed on the businessmen. To address this, he recommended reinstating a provision similar to Section 37 of the Income Tax Ordinance 1984.
The DCCI president also requested for the income tax system to be brought under the automated system with the aim of simplifying tax payment and all tax related matters. If the tax at source is not possible to be adjusted with the installment of advance income tax at this moment, the provision may be issued to provide an opportunity to carry forward the tax at source deducted from the payment of goods and services provided by the MSME to the next tax year along with the income tax. Currently there is a provision of fine up to 400% if the HS code is incorrect even if the product description is correct. For these businesses often face harassment. If the product’s description or HS code is correct there should have been an opportunity to amend and withdraw the declaration of goods filed at the assessment stage by amending Section 86 (1) of the Customs Act 2023.
NBR Chairman Md Abdur Rahman Khan said that only 5% of our total populations pay tax, whereas in India the rate is 23% and in existing reality we have no option to expand the tax net.
The NBR Chairman further said that the maximum revenue comes from the existing tax payers and a large section of the society is out of the tax net, thereby increasing the pressure on the existing tax payers. If the non-tax payers remain out of the net year after year, the existing tax payers will be discouraged from paying tax, so the NBR will work on priority basis to expand the tax net in the next six months, he said.
He further said that due to multiple tax layers at various stages, effective tax rate especially of corporate tax sometimes increases, but the issue will be considered seriously by the NBR. Without reducing tax collection target, the revenue management of the country will be streamlined along with rationalizing the tax rate, he added.
The NBR chairman called upon the business community to maintain the transaction process through cashless recordable system and banking channels which will help prevent TAX or VAT evasion.
He later urged DCCI to conduct research studies solely or jointly with NBR to identify various problems in the revenue sector and submit the probable findings that NBR would try to solve at the earliest possible time.
DCCI Senior Vice President Malik Talha Ismail Bari and Vice President Md Junaed Ibna Ali, Members of NBR Md. Masud Sadiq, AKM Badiul Alam and G M Abdul Kalam Kaikobad were also present on the occasion.