Stakeholders demanded the AIT and advance commercial VAT (ATV) increase the cost of doing business
The local business community and association leaders are now calling for the complete elimination of withholding income tax (AIT) and withholding tax (AT) gradually over the next few years.
Finance Minister AHM Kamal proposed to reduce the AIT from 3% to 2% for the next fiscal year (FY 2021-2022) when presenting the proposed budget on June 3.
Stakeholders claimed that the AIT and advance commercial VAT (ATV) increase the cost of doing business, and since the ongoing coronavirus pandemic has hurt all businesses, they demanded the withdrawal.
Kamal proposed AT exemption on threshers, combines, tillers, powered seed drills, combines, tillers, weeders and winnowers – to modernize the agricultural sector and reduce production and marketing costs agricultural machinery.
He had also proposed to impose a tax of 10% on income over 20 lakh Tk and 15% for more than 30 lakh Tk, against 10% currently for fish farmers and fish farmers.
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In addition, although the AIT has been reduced from 3% to 2% in the proposed budget, it remains a burden on the import-dependent cement sector, according to Alamgir Kabir, president of the Bangladesh Cement Manufacturers Association (BCMA).
In a post-budget dialogue virtually hosted by the Chittagong Chamber of Commerce and Industry (CCIC) on Tuesday, he said average import duties were between 10 and 11 percent, making it difficult to survive. highly competitive sector.
In addition, Tk 500 is to be paid as an import duty per tonne of clinker, the main raw material for cement, he also said.
He proposed to withdraw the 3% ACI by issuing a regulatory decree (SRO).
According to Kabir, about 1,000 crore of Tk from AIT reimbursable has yet to be reimbursed to companies by the National Board of Revenue (NBR).
Before the budget, to the BNR advisory committee, he said: “There is a huge shortage of working capital in the cement sector, and if the AIT is repaid correctly on time, the sector does not have to. depend on bank loans. ”
In contrast, the proposed budget for the next fiscal year did not repeal or reduce the additional 15% duty on the production and supply of household tiles.
According to the Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), the tariff on imported tiles has been reduced to $ 1 per square meter, so the price of imported tiles can be reduced by up to Tk 10 per foot. square.
The tariff on imported tiles has been reduced without removing the additional duty at the production and supply stage. This will increase imports and the suffering of local entrepreneurs, explains Shirajul Islam Mollah, president of BCMEA.
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According to the companies in the sector, a product worth 100 Tk entails an additional duty of 15 Tk and an additional VAT of 15 Tk. In this case, removing tariffs on imported tiles without reduction or removal of SD or VAT will hamper local tile contractors.
On the other hand, in an effort to help the country’s steelmakers cope with soaring item prices on the world market, the Bangladesh Steel Manufacturers Association (BSMA) also urged the government to reduce tariffs. Customs (CD) and AIT on the import of scrap metal – the key raw material for the manufacture of steel.
According to BSMA, the customs duty for waste is 1,500 Tk per tonne and 800 Tk AIT per tonne.
He had asked the government to reduce it because it was not mentioned in the draft budget which has just been tabled for the next fiscal year 2021-22 (FY’22).
Regarding withholding tax, Faruque Hassan, president of BGMEA, at a post-budget press conference demanded the maintenance of the current 0.5% withholding tax for the next five years, although ‘a reduction to 0.25% was proposed before the budget; since the Minister of Finance did not clearly mention the withholding tax rate in his budget speech.
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Even the Bangladesh Federation of Chambers of Commerce and Industry (FBCCI) had also expressed its dissatisfaction with the increase of the withholding income tax (ACI) from 5% to 20% in the draft budget for the 2021-2022 fiscal year, fearing a disruption in the ease of doing business.
In the draft budget, the government reduced the rate of turnover tax for individual taxpayers from 0.50% to 0.25%.
The FBCCI urged the government to make the rate effective for all businesses.