Hossain Khaled, President of the Dhaka Chamber of Commerce and Industry (DCCI), on Saturday gave an exclusive interview to the Daily Observer on the upcoming budget and opportunities business community demand from it.
He said the government needs to discourage whitening of black or undisclosed money from the next fiscal year. He also urged the government to prevent the source of black money. He requested the government to issue tax card to all tax payers so that they can be proud of being tax payers.
Businessmen could not run their businesses during the last three months for political deadlock. They are facing difficulty in paying bank interest. He requested the government to consider 50 per cent rebate on all charges of Chittagong port. Bangladesh is a land of 160 million people whereas we have only 1.8 million tax payers, he observed.
DCCI President also urged the government to give tax exemption facility to chambers/trade bodies as these organizations spend most of their income in doing research, policy advocacy and publication activities to promote trade and commerce.
He proposed reduction of advance income tax (AIT) to 3 per cent from 5 per cent in case of import. If any multinational company floats more than 30 per cent share in the capital market in that case he proposed for 5 per cent tax rebate. He also proposed for reducing corporate tax rate for merchant banks to 35 per cent from existing 37.5 per cent. And for listed companies he proposed to reduce it to 25 per cent from 27.5 per cent. He also sought tax holiday for 20 years for private software park. Government can impose additional duty or tax on imported finished goods which are being produced in Bangladesh in order to protect local industry, he added.
He opposed new tax and increase in VAT amount, but it tax net can be widened. New businessmen need to come under tax net. Tax, GDP ratio needs to increase in the country. Tax evasion must stop, he added.
Observer: You are president of DCCI. What is your thought of new budget?
Hossain Khaled: The Finance Ministry seeks ways to enhance income from revenues and VAT to cover it up. The VAT-free limit for the country's small and medium enterprises (SMEs) is likely to be increased to Tk 36 lakh from the existing level of Tk 24 lakh. Individual tax-free limit is likely to be increased. To boost revenue collection tax net will be expanded.
Observer: What role will you play to get bank interest rate reduced?
Hossain Khaled: The priority of the business is to bring interest rate on bank loan down to a single digit. We are having discussions with the Finance Ministry to reduce bank interest. The government is also willing to lower interest rate. I hope the bank interest rate will come down to a single digit soon.
Observer: A conflict is continuing between the government and businessmen about value-added tax (VAT) law-2012. What is your comment about this?
Hossain Khaled: We have to increase the tax net to increase revenue collection. The new VAT law 2012 should be business-friendly. He urged the government to impose minimum fixed VAT on small and medium traders like before. He also urged for 7.5 per cent VAT instead of existing 15 per cent ensuring widening of tax net. VAT and Tax will have to be business-friendly. Four to seven per cent VAT is fixed in Singapore and Thailand. So the businessmen of those countries pay their VAT in time. But VAT rate is high in Bangladesh. I want just the same VAT rate across the country and the VAT at four per cent, he added.
DCCI President proposed tax free income limit for individual tax payers at Tk. 2,75,000 from next fiscal year.
Observer: How will you go ahead to balance the business loss due to recent political unrest?
Hossain Khaled: DCCI has to communicate with all to protect the interest of businessmen. We will apply to the government to waive bank interest. Especially, for the small entrepreneurs who have taken Tk 50 lak to 20 crore loan.