Cutbacks on corporate taxes and import duties on raw materials and capital machinery are in a package of proposals Bangladesh's investment-promotion agencies (IPA) placed for the next budget to lure investors.
They also urged the government to make the tax policy predictable to create a feel-good business climate in the country.
The IPA-a group of regulatory bodies in fields of trade, business and investment-particularly called for easing the import of raw materials and capital machinery for the nascent industrial parks.
Top brass of the agencies made the request as well as presented the recommendations from their respective sides at a pre-budget meeting with the National Board of Revenue (NBR) at the latter's office in Dhaka's Segunbagicha area.
NBR Chairman Abu Hena Md. Rahmatul Muneem presided while NBR members Md Masud Sadiq, Zakia Sultana and Md Shamsuddin Ahmed also spoke at the programme-one of a series being arranged by the revenue authority to elicit opinions before getting down to cobbling up in the upcoming budget that the government's finance authorities look to be ambitious one as usual in a row.
On the other side were representatives of the IPAs like Bangladesh Investment Development Authority (BIDA), Bangladesh Economic Zones Authority (BEZA), Bangladesh Export Processing Zones Authority (BEPZA), and Bangladesh Hi-Tech Park Authority (BHTPA), as well as a private think-tank Business Initiative Leading Development (BUILD).
BEZA Executive Member Ali Ahsan, BIDA Director-General Shah Mohammad Mahboob, BEPZA Executive Director Khorshed Alam, BHTPA director joint secretary ANM Shafiqul Islam, and BUILD Chief Executive Officer (CEO) Ferdaus Ara Begum attended the meeting, among others.
Weighing the pros and cons of the proposals, the NBR chairman said some of the benefits sought for the investors in the special economic zones could create uneven competition.
"Additional benefits for investors with IPA could create scope for uneven competition, as we have to consider that making investment in the country is not merely limited to the areas under BEZA, BEPZA or BHTPA," he notes.
He also said corporate-tax rates had been significantly reduced for the investors in the industrial parks.
"Business entities there (special zone) get waiver for higher amount and for such a long time that they already end up with their operations in some cases," he says.
Presenting the budget proposal, BEZA officials called for exemption of 4.0- per cent advance tax on raw materials imported by the industries.
BIDA proposed reducing corporate taxes for the businesses in the country.
"Corporate tax and overall taxes including advance tax and source tax accumulate to 40-45 per cent in Bangladesh, while the global corporate income-tax averages hovers between 21 and 24 per cent," BIDA says to press their point.
The rate is 24 per cent in Malaysia, 20 per cent in Vietnam and 25 per cent in Indonesia, BIDA adds and suggests lowering the corporate-tax rates from 32.5 per cent to 28 per cent.
It also called for widening corporate-tax net to cover global tech giants like Google, Amazon and Facebook, who provide VAT but still stay beyond the purview of corporate tax.
BEPZA officials called for updating Statutory Regulatory Order (SRO) to facilitate import of all types of fire-fighting equipment by the industries working in the EPZs.
It also seeks NBR's support for easing the import of building materials and foodstuffs for foreigners through updating related policies and SROs.
The BUILD suggests lowering advance tax on profit from 20 per cent to 10 per cent for companies and from 10 per cent to 5.0 per cent for individuals.
Underlining the importance of innovations in this era of high-tech economic advances, the private think-tanks called for involving the private research organisations, universities and other stakeholders with a research fund worth Tk 500 million declared by the government in a previous national annual budget.
