MCCI urges trade friendly taxation

Metropolitan Chamber of Commerce and Industry (MCCI) yesterday proposed the government take trade and industry friendly taxation measures to assist the productive sectors in the budget for fiscal 2011-12.

The chamber asked for simple, flexible and business friendly amendments to any tax and revenue law in its pre-budget meeting with the chief of National Board of Revenue (NBR) at his office.

"Experiences say that stringent rules and regulations do not help increase revenue. Rather, business friendly and flexible laws ensure better revenue generation and collection," said MCCI President Amjad Khan Chowdhury at the meeting.

The chamber also suggested the government provide a comprehensive package of fiscal measures to support the productive sectors and raise sufficient revenue to meet its growing expenditure and check the budget deficits.

MCCI urged the government to contain inflation and enhance budgetary spending on infrastructure, education, health and social services, which will boost the country's growth potential, create employment and cut poverty.

The MCCI called for measures for fiscal concessions, including income tax, customs duty and value added tax (VAT).

The tax exemption limit for individual taxpayers, now Tk 165,000, should be raised to Tk 250,000, it said.

MCCI proposed a continuation of tax holiday and inclusion of more members from potential sectors in such schemes.

When a company raises its share capital at a value in excess of the face value, the company shall be taxed on the premium over face value at a rate of three percent. "We strongly recommend revoking this provision. It should be noted that in advanced countries like the US and EU, there is no tax on premium over book value," Chowdhury said.

He proposed not to charge the income tax on any new equity other than net income.

The chamber said reduction in the highest rate of tax will encourage the individual being assessed to declare higher incomes than what they do now and hence minimise tax evasion.

Therefore, the chamber suggests that the highest rate of income tax for individuals be reduced from 25 percent to 20 percent.

Source: The Daily Star (May 9, 2011)