DCCI for uniform single-digit VAT rate across the board
At present, the standard VAT rate is 15% across the board, but it has been segregated to different slabs like 10%, 7.5% and 5% in different sectors that actually caused difficulties for traders as well as disputes in many cases, and many traders are forced to bear the burden of additional tax due to non-availability of input tax rebate benefit. Therefore, Dhaka Chamber of Commerce & Industry (DCCI) proposed to set a uniform single-digit VAT rate across the board and nominal 1% VAT for the traders of informal sector in the next budget, which would bring transparency in the overall revenue management, reduce cost of doing business and have a positive impact on the manufacturing sector.
These proposals were submitted by Taskeen Ahmed, President of Dhaka Chamber of Commerce & Industry (DCCI) while he placed the Chamber’s budget (FY2025-26) proposals to the Chairman of NBR Abdur Rahman Khan, FCMA. This year total 42 budget proposals were placed by Taskeen Ahmed focusing on widening tax net and setting a target of revenue collection, reducing tax rates, introducing business-friendly tax policies and automation of revenue system, reforming VAT management, protecting local industries and manufacturing sectors, simplifying import duty, tariff system and tax structure for the individuals.
DCCI President Taskeen Ahmed congratulated the NBR for taking the initiative to bring all taxpayers under the online income tax return process from the next fiscal. He also mentioned that according to NBR data, there are more than 10.13 million TIN holders in the country, but from July 1, 2024 to February 6, 2025, only more than 37 lakh returns have been filed. DCCI President proposed to set a short, medium and long-term target for increasing tax payers and expanding the tax net. Taskeen Ahmed also called for introducing of an automated tax return system to facilitate corporate entities to file their tax return online. Also considering the prevailing inflationary situation and its burden on the mass people, he requested for raising the tax-free income limit for the individual from Taka 3.50 lakh to Taka 5 lakh. In addition, the DCCI president proposed for gradual reduction of advance tax at the import level for the commercial importers and gradual phasing out of the existing advance tax for the manufacturers at the import level. He said, traders have to pay more customs duty than the actual import price due to the difference between the tariff value set by the customs authority and the market price, which is increasing the business cost as well as making the import process complicated and expensive. That is why; he proposed to impose a fixed rate of customs duty instead of tariff value set by the customs authority.
National Board of Revenue (NBR) Chairman Md. Abdur Rahman Khan, FCMA said the NBR is determined to expand trade and investment through gradual reforms of trade-related revenue policies. He also said that NBR will try to address the tax expenditure; adding this he also said that a portion of people are giving tax and the others are not, this cannot be accepted.
At present the TIN holders in the country are about 10.14 million whereas we see that the number of TIN holders has increased by ten million in the last ten years, but the number of tax payers has not increased to the desired level compared to that, which is disappointing. He also said that NBR is working to bring corporate tax return system completely online soon and for this, initiatives have also been taken. The NBR Chairman also opined that there is a need to reduce the corporate tax rate in order to create an environment to transform individual enterprises into corporate entities gradually under a corporate culture in the long run. Regarding various VAT rates, he said if the business community agrees and can come to a consensus, government is keen to bring the VAT rate to a single digit instead of maintaining different slabs that actually creates complexities in reality. But for that businessmen’s will, accountability and transparency are essential in this regard, he added. In this connection, he proposed that NBR can develop integrated software to be made only by the local IT expertise to easily calculate accounting, do audits and can submit VAT even income tax returns automatically without hassle so that all can take its benefits centrally but in online. This proposed software may be developed through web-based and by this system, NBR will have the access of TIN and BIN holders’ database also. He later said the NBR will try to be liberal in terms of tax rebate system in the next fiscal year.
DCCI Senior Vice President Razeev H Chowdhury and Vice President Md. Salem Sulaiman were also present at that time.
