Bangladesh Association of Banks (BAB) has placed a set of proposals to the National Board of Revenue (NBR) for inclusion in the fiscal budget 2023-24. The proposals include requests to permit 1.0-per cent loan-loss provision and CSR activities as "allowable expenditure" in the next fiscal layout.
The association of private sector commercial banks also proposed restructuring of the existing individual tax rates, by dividing the rates into five slabs from Tk 0.5 million to Tk 3.5 million and above.
"Banks spend a lot of money to recover bad loans including legal battle, sometimes it incurs more than 1 per cent and it takes from our profit, so please consider this as allowable expenditure," said Nizam Chowdhury, Chairman of NRB Global Bank Ltd, at a pre-budget consultation meeting at the NBR head office in the city on Sunday.
Bangladesh Insurance Association (BIA) also placed three proposals at the same pre-budget meeting, including withdrawal of 15 per cent VAT on health insurance and reinsurance commission.
The BIA also requested NBR to withdraw 5 per cent gain tax on profits from life insurance policy.
NBR Chairman Abu Hena Md. Rahmatul Muneem was present at the meeting.
Speaking at the meeting, BAB member Nizam Chowdhury said that in view of the high inflation the existing ceiling of individual tax-free income of Tk 300,000 needs to be increased to improve disposable income.
He proposed zero tax on an individual's income of Tk 500,000, 10 per cent on Tk 600,000, 15 per cent on Tk 800,000, 20 per cent on Tk 1.0 million and 25 per cent on Tk 3.5 million and above.
The banks' association proposed a raise in the tax-free income ceiling to Tk 550,000 for women and senior citizens.
The exemption limit should be Tk 600,000 for freedom fighters and disabled persons," said the written proposal signed by BAB Chairman Md. Nazrul Islam Mazumder.
On CSR projects, Nizam Chowdhury said banks spend money worth Tk 20.20 billion or more under corporate social responsibility (CSR) programmes which should be considered as allowable expenses.
The banks' association has proposed to revoke excise duty on loan account as it thinks the duty is illogical and unethical.
The BAB also requested the NBR to consider setting the corporate tax rate at 20 per cent for merchant banks as the existing 37.5 per cent is not fair and competitive for them who are not banks in nature, rather they are asset management companies or brokerage houses.
The BAB recommended making payments hassle-free in case of any payments to non-resident Bangladeshis if there is any double taxation treaty and a cut in the tax rates, if there is no such treaty.
The association appealed to the NBR to withdraw the current provision of payment against stay order on recovery of tax payable where reference application has been made to the High Court Division.
The proposals of BAB also include allowing depreciation expenditure of right-of-use assets, acceptance of VAT challan as Mushak 6.3 for Input VAT rebate, enhancing the house rent allowance for the employees, enhancing allowable limit of medical expenses and revoking the provision of u/s 32 of the VAT Supplementary Duty Act 2012 for the banking industry.
