Submission of return tagged with bank loan: Bankers bat for raising ceiling up to Tk 50 lakh
Staff Reporter :
Bankers proposed for upward revision of the existing NBR provision on getting a bank loan from Tk 20 lakh to Tk 50 lakh.
The Association of Bankers, Bangladesh (ABB) also urges tax exemption on income derived from provident and other pension funds from 15 per cent for FY2024-25, to ensure social security of the private workers after retirement.
The ABB placed the proposal to the National Board of Revenue (NBR) at a pre-budget discussion held at the revenue board office in the capital on Tuesday.
Earlier, NBR issued a Statutory Regulatory Order (SRO), saying “The tax rate on income from provident fund, gratuity fund, superannuation fund, and pension fund has now been fixed at 15 per cent for FY2023-24.” The tax was 27.5 per cent in this end.
“The income security of private jobholders is lesser than government jobholders. Apart from that, if such tax policy on provident fund continues, inequality will be further increased among these jobholders,” ABB Chairman Selim RF Hussain said.
The association also demanded withdrawal of mandatory requirements to open or continue term deposits. Besides, it proposes to withdraw the same provision for getting credit cards limited to Tk 5 lakh.
Regarding the proof of return submission, Hussain said, “Due to the existing provision, the negative impact has fallen on the banking sector, especially on retail and Cottage, Micro, Small & Medium Enterprises (CMSME) customers.”
It also urges to withdraw taxes as earlier on capital gain derived from treasury bills and bonds.
Dhaka Stock Exchange (DSE) urges a reduction of tax at sources from the TREC holders. It said that Tk 50 is deposited against Tk 10 lakh at source. If it continues, the survival of TREC holders will be difficult.
“Considering the present market situation and the effect of Covid-19, and the world economic crisis, such tax rate should be reduced to Tk 20 per Tk 10 lakh. The tax was Tk 15 in 2005,” it said.
The Chittagong Stock Exchange (CSE) said that there is no incentive to expand the capital market within the existing finance act and the market.
Besides, Bangladesh Insurance Association (BIA) urges to withdraw 5 per cent gain tax on profit of policy holders.
It said that as per the Income Tax Ordinance 2014 imposing 5 per cent gain tax on the profit of policy holders of all life insurance companies in the country, the number of policy holders is continuously decreasing.
“Small policyholders in the country will be deprived of getting insurance services. Hence the withdrawal of gain tax is very important. There is no example of imposing such a gain tax in most of the countries of the world including the neighboring country India,” it added.
Presiding over the discussion, NBR Chairman Abu Hena Md Rahmatul Muneem said, “The government requires enhancing its capacity to combat post-LDC graduation challenges. The capacity of revenue collection will be boosted.”
“So, only tax reduction is not a solution. Rather, you should have to enhance your capacity by reducing dependency on policy support. You should also have to boost the confidence of your stakeholders and enhance security of the capital market,” he added.
