Business Reporter :
The Small and Medium Enterprise (SME) Foundation has proposed 1 percent advanced income tax (AIT) on raw material importing instead of the current 5 pc.
Besides, it also demanded the introduction of Preferential Tax Regimes or SME clusters to support the growth and development of SME entrepreneurs across the country.
Experts and Business leaders supported these proposals saying it will be helpful to expand SMEs across the country.
“These proposals are really suitable for expanding SMEs. It also will boost the national economy as well. The government should accept and implement these swiftly,” Chief Executive Officer of Riverstone Capital Limited and Dhaka Chamber of Commerce and Industry (DCCI) former President Ashraf Ahmed told The New Nation.
He said, very high AIT rates, without the possibility of refund, discriminate against compliant tax paying enterprises and encourages non compliance.
“Our current rate of AIT deduction rate is very high for compliant SMEs, partly because there is no method for tax refunds. For example, service SMEs pay a 10% AIT on revenue, but rarely, if ever, generate a 40% profit, which justifies the tax. Under normal circumstances, they should be able to get a tax refund, which is not possible under current system. AIT should be reduced, or a refund mechanism installed for compliant tax payers,” Ashraf said.
As part of the recommendations of the SME Foundation it urged the government to exempt annual turnover up to Tk 1 crore from VAT. It further proposed fixed monthly tax rates based on turnover: Tk 35,000 for turnover between Tk 1 crore and Tk 2 crore, Tk 75,000 for turnover between Tk 2 crore and Tk 3 crore, and Tk 1,50,000 for turnover ranging from Tk 3 crore to Tk 5 crore.
These proposals were presented by SME Foundation General Manager Mohammad Jahangir Hossain during a view-exchange meeting titled “SME-friendly budget proposals 2025-26,” held at the ERF auditorium in the capital. The event was jointly organized by the SME Foundation and the Economic Reporters’ Forum (ERF).
SME Foundation Chairperson Md Mushfiqur Rahman attended the meeting as the chief guest. Special guests included the Foundation’s Managing Director Anwar Hossain Chowdhury and Board Member Shamim Ahmed, who also serves as President of the Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA).
ERF Acting President Ashraful Islam presided over the session, while General Secretary Abul Kashem moderated the discussion.
