Pre-budget discussion FY2024-25: Structural reform in duty tax regime proposed

Staff Reporter :
Economic Reporters’ Forum (ERF) proposed structural reforms in the country’s duty tax regime with a view to easing LDC graduation.

It also proposed increasing the individual income tax-free limit to 5 lakh from 3 lakh in the upcoming fiscal year (2024-25).

The ERF placed the proposals at the pre-budget discussion with the National Board of Revenue (NBR) at the latter’s office in the capital on Monday.

In the written proposals, the ERF said, “Bangladesh’s tariff is higher than the average of LDCs. There has been talk of lowering tariff rates for the past few years, but little progress has been made.”

“In the meantime, Bangladesh Bank has started a programme to reduce cash assistance as part of reducing subsidies. So, the NBR needs to start reducing various types of tariff walls from the upcoming budget,” it said.

“Otherwise, it will be difficult to deal with the shock of suddenly lowering the tariffs in the case of free trade agreements,” it added.

“Besides, clear explanations and accountability are needed in granting tax exemptions. In addition, an estimation of revenue loss associated with each tax exemption order needs to be given,” it added.

Referring to the fact that there are many large businesses in rural area, the EFR proposed setting up Medium Taxpayers Units like Large Taxpayers Units (LTUs) in District and City Corporations.

Among the other proposals, it placed for refunding the deducted tax on bank interest to those who do not have taxable income, limiting the tax rate to 5.0 per cent on daily necessities, education and medical materials, introducing a separate revenue policy for the development of small and medium industries, planning short, medium and long-term revenue in the upcoming budget.

Responding to the proposals, NBR Chairman Abu Hena Md Rahmatul Muneem said, “Income tax return submission has been doubled in last four years as the return filing will be increased to 40 lakh at the end of June this year, which was 21 lakh in 2020.”

“Similarly, VAT registration has also been increased to 5 lakh during the four years time from 2.5 lakh,” the NBR chairman added.

ERF President Refayet Ullah Mirdha, Senior Member Doulot Akhter Mala and NBR member AKM Badiul Alam, among others, were present.