Sherpa Hossainy's Blog

ICAB for fresh tax ceiling

Posted in Bangladesh, Business, Corporate, Dhaka, Finance by Sherpa Hossainy on June 8, 2011

Published in The Independent on 7 June, 2011

Read the article on Independent website

Digital print version

The government should bolster direct tax collections rather than relying heavily on indirect taxes, the regulatory body for chartered accountants suggested on Monday.

“To eliminate growing economic inequality the government should emphasise on simpler direct tax collection method,” said Parveen Mahmud, president of the Institute of Chartered Accountants of Bangladesh (ICAB).

She was speaking at a press conference on the national budget 2011-12 at the ICAB auditorium in Dhaka, where she presented a summary of a 47-point proposal ahead of the upcoming budget.

Mahmud said, “Increasing the tax department’s efficiency and redefining slabs of income and scopes of tax is essential.”

The ICAB president informed that only 7 lakh people, among 22 lakh having Tax Identification Number (TIN), submit tax returns. The rest don’t as their income is under the minimum taxable level, she said.

She proposed an amount of Tk 2,500 to be imposed as renewal fee for the TIN certificate for such non-submission of the return.

“This is likely to increase the total tax revenue by Tk 375 crore ($53.57 million) a year,” Mahmud said.

She said that there are many NGOs who do not submit their tax returns. NGO affairs bureau can ask them to produce the current tax clearance certificate before renewing enlistment, she proposed.

Mahmud also proposed to raise the current tax-free income limit for male and female senior citizens (aged 65 years or more) to Tk 200,000 and Tk 225,000 respectively, which is now Tk 165,000.

“Minimum tax may also be increased to Tk 2,500 from Tk 2,000 taking the rising inflation into account.

“The limit of tax-free perquisites (house rent, conveyance and medical allowances) in case of salary income could also be increased up to Tk 400,000 from Tk 250,000,” she suggested.

Extending tax-holiday scheme, which is due to expire on June 30, for five more years, reducing corporate tax rates, single VAT registration for all business premises and developing a unique VAT software for NBR were among other proposals from the ICAB.

Reduction of import duties for raw materials and machineries to increase the competitiveness of locally manufactured products is also necessary, Mahmud said.
The budget for the financial year 2011-12 is going to be placed in the national parliament on June 9.

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