No tax exemptions unless absolutely necessary: NBR chairman
NN Online:
National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan said on Monday that the government has pledged not to allow any tax exemptions in the future unless absolutely necessary for the country’s interests.
“We are going out of the tax exemption culture, we have scrapped existing tax exemptions. We will not give any tax exemption afresh and we have taken a vow. We have prepared a policy, we will not give any tax exemption,” he said.
The NBR chairman said this while addressing a pre-budget meeting at the NBR conference room at the Revenue Building in the city’s Agargaon Area on Monday.
Representatives from different financial institutions like banks, insurance, leasing and merchant banks, Bangladesh Securities and Exchange Commission, Dhaka Stock Exchange, Chittagong Stock Exchange and DSE Brokers’ Association joined the pre-budget meeting to place their budget proposals.
Following repeated tax exemption proposals from various quarters, the NBR chairman said that there is no logical ground to seek tax exemption before establishing any entity.
“The first demand is tax holiday, why? This attitude has to be pulled out from our mentality, otherwise, nothing will happen. Every place there is one demand- tax holiday, we do not want to live with this tax exemption culture anymore,” he said.
The revenue board chief made it clear that in the past there was no development with this tax exemption. “We did not get any positive result wherever we gave such a tax exemption,” he added.
He mentioned that the government in the past nurtured the tax exemption culture and currently the country is paying badly for that.
“For that purpose, the tax GDP ratio is not increasing in the country as one analysis said that Bangladesh was losing the same amount of money that it collects as revenue due to the tax exemptions. We don’t want to bear this bad name anymore,” he said.
Talking about the present condition of the capital market of Bangladesh, Md Abdur Rahman Khan said the basic problem is the lack of good governance in the capital market.
He mentioned that no country in the world could be developed without developing the capital market.
“Bangladesh will not be able to do that since we have ruined this place through various means, still we are depending on the banking sector for the source of money for industrialisation,” he said.
In this connection, he blamed the regulators for the lack of confidence of the investors in the capital market.
Rahman said business people used to take loans from the banks for setting up their industries, but they are not interested in going to the capital market to raise funds.
“Why are they not coming to the capital market, I don’t know that,” he wondered.
He said taking money from the banking sector as a loan while raising funds from the capital market is “absolutely free money.”
“If you take money from the bank you have to start repaying just after one year, but you will need five years to set up the industry, to reach the break-even point you will need 20 years. Then how you will do your business taking money from banks,” he added.
He said this culture is going on in Bangladesh which indicates there is something fishy.
On the other hand, he said although many are going to the capital market for fundraising for industrialisation, after some time it was revealed that there was no industry being set up with that money.
“That means the regulators did not perform their duties properly, whatever the tax benefits we give to the capital market, it will not bring any positive result unless the confidence of the investors returns to this capital market,” he said.