Given the uncertainty of the economic situation, tax officials found it difficult to set progressive corporate tax rates in the state budget.
Both Income Tax and Value Added Tax (VAT) members have stated that given the current economic climate like the Covid-19 pandemic, the government will develop fiscal measures if the industry needs assistance.
Dr. Abdul Mannan Shikder of the VAT Wing and Md Mahbub Hossain of the Income Tax Wing made the observations at a post-budget webinar on “The salient features of Finance Bill-2021” organized by Snohomish Maimed and Co, Chartered Accountants Firm .
Representatives from companies, economists, accountants and other stakeholders took part in the virtual discussion.
Institute of Chartered Accountants of Bangladesh (ICAB) Fellow Member Snehasish Barua and founding partner of this CA firm gave a detailed presentation of the key features of the proposed budget for fiscal year 2021-22.
Companies have long required a progressive corporate tax rate for three to five years in order to create an investment plan based on tax rates.
In its budget proposal, the Dhaka Chamber of Commerce and Industry (DCCI) called on the government to lower corporate tax rates by 2.5 percent annually through 2024 in order to bring them down to the level of other neighboring countries.
VAT member Dr. Shikder said that while it is difficult to set tax rates for long periods of time, it is in place for some sectors that have had tax exemptions for several years.
In the program, business representatives called for identical tax rates for banks and other financial institutions as other corporate taxpayers.
Except for Pakistan, all other countries do not have such separate tax rates for financial institutions, said the Managing Director (MD) and Chief Executive Officer (CEO) of IPDC Finance Limited Mominul Islam.
Berger Paints Bangladesh Limited executive director Rupali Chowdhury said the proposed budget did not offer any tax benefits to banks and the telecommunications sector.
She said the budgetary impact of the rise in non-performing loans on banks’ financial health should be considered.
In the telecommunications industry, she said that tax of Tk 53 was deducted for expenses of Tk 100 by cellphone users, which is now affecting the penetration of that sector.
Ms. Chowdhury also urged the government to lower the pre-tax rate, suggesting measures to increase domestic demand for the survival of local industries.
Evercare Hospital Dhaka’s Chief Financial Officer (CFO) Mustafa Alim Aolad said the proposed 10-year hospital tax exemption would not help investors much as it would take the allotted time to build a new hospital to make it profitable.
Rather, he called for a tax exemption on imports of all types of equipment for hospital use.
Shhoz Maliha Quadir’s founder and managing director called for a reduction in the cost of the Internet and SIM card usage and not an increase in the corporate tax rate for mobile financial services (MFS).
Mominul Islam also agreed to ensure access to finance for marginalized groups of people.
The Chairman and CEO of Policy Exchange of Bangladesh, Dr. M. Masrur Reaz said the Covid vaccination would require around $ 2.4 billion but the budget is lacking.
“It is not a Corona-fair budget. There is no assignment to protect employment, ”he said.
The opening speech was given by the founding partner of the CA company Zareen Mahmud Hosein. Another partner of the law firm Sukanta Bhattacharjee gave the closing remarks at the event.
However, at a press conference on Monday, tax lawyers called for an extension of the deadline for filing corporate tax returns for FY 2020-21 in view of the Covid-19 pandemic situation.
The Dhaka Taxes Bar Association (DTBA) and the Bangladesh Tax Lawyers Association alleged that a portion of the tax officials had not received tax returns from corporate taxpayers after the deadline.
At the press conference jointly organized by the two associations in the National Press Club, tax lawyers called for an extension of the deadlines for tax returns under 184G.
The deadline for submitting individual tax returns expired on December 31, 2020, and for corporation tax returns on January 15, 2021.
The tax attorneys called for an extension of the deadline to August 30, 2021 in order to support entrepreneurs in complying with the tax law.
According to the tax law, the deputy tax commissioner and the joint tax commissioner are authorized to grant taxpayers a longer period in which to submit declarations.
The deadline expired for natural taxpayers on April 30, 2021 and for companies on May 30, 2021.
Golden Bangladesh executive director Md Jahangir Alam said the tax department was not defined as an emergency service provider during the lockdown until May 17, 2021.
Many corporate taxpayers have failed to file their tax returns on time as a result, he added.
The general secretary of the DTBA Md Mustafizur Rahman and the BTLA convener Md Sohrabuddin spoke on the program.