NN Online:
The Chairman of the National Board of Revenue (NBR), Md Abdur Rahman Khan, announced on Tuesday that the government plans to gradually reduce and potentially abolish tax exemptions in the future. Speaking at a pre-budget meeting at the NBR conference room, Khan emphasized the need for a shift away from the culture of tax exemptions, citing concerns over the increasing tax expenditures.
“We do not want to incur further tax expenditures. It is time to move away from the culture of tax exemptions,” Khan remarked during his address. His statement was made in the presence of representatives from various professional bodies, including the Institute of Cost and Management Accountants of Bangladesh (ICMAB), Institute of Chartered Accountants of Bangladesh (ICAB), and the Bangladesh Tax Lawyers’ Association (BTLA), among others.
Khan further urged stakeholders to avoid advocating for tax exemptions, stressing that income tax is a reasonable portion of profits and should not deter businesses from operating. “Income tax is applicable when there is a profit. No one goes bankrupt by paying income tax, as it is just a portion of their earnings,” he said. He also criticized the mindset of seeking tax exemptions before starting a business, stressing that investment decisions should focus on economic viability, geographical advantages, and potential returns, rather than tax relief.
In his speech, the NBR chairman also raised concerns regarding foreign-funded government projects, stating that structural changes to agreements are necessary to ensure proper tax collection. He pointed out that without these changes, the country continues to miss out on significant tax revenues. Khan called for contracts to explicitly state that tax payments are the responsibility of the contractor, aiming to curb tax evasion, a problem he described as rampant in the sector.
“A significant amount of tax evasion is happening in this sector, and a broad discussion is needed to address the issue,” he said, calling for greater attention to the enforcement of tax regulations and careful vetting of agreements to prevent further loss of revenue.
The NBR’s shift towards phasing out tax exemptions marks a notable move in the government’s ongoing efforts to streamline the tax system and boost domestic revenue collection, which has been a subject of discussion in recent years. Khan’s comments suggest that the government is taking steps to create a more transparent and sustainable fiscal environment, free from over-reliance on tax exemptions.
