The Institute of Cost and Management Accounts of Bangladesh (ICMAB) participating in a pre-budget discussion has proposed to exclude all types of agricultural products and consumer goods from the scope of tax deduction at source.
The ICMAB has also proposed Facebook, Google, and other popular social media and technology companies to introduce the provision of appointing local agents to bring them under taxation.
The organisation made the proposals to the National Board of Revenue (NBR) at a pre-budget discussion with some financial audit institutions, held at the Revenue Building in Agargaon in the capital on Thursday, reports UNB.
The leaders of ICMAB, ICSB, ICAB, IAB, Bangladesh VAT Professional Forum, and Earnest & Young Advisory Services Limited participated in discussions with the NBR.
Besides, the Institute of Chartered Secretaries of Bangladesh (ICSB) has proposed to increase the tax-free income limit from Tk 0.30 million to Tk 0.70 million.
ICMAB president Abdur Rahman Khan suggested taxing the income of the digital economy. He said according to the Income Tax Act, there is no provision to bring any foreign company under the tax levy if it does not have a permanent office in Bangladesh.
As a result of technological development, foreign companies are doing business through digital platforms without keeping a permanent establishment.
“If the Income Tax Act, like the VAT Act, provides for the appointment of a local agent, the foreign company will have a local agent and it will be considered as their local establishment in Bangladesh,” the ICMAB president said.
The local agent will be liable to pay tax on the income earned in Bangladesh, he said.
Regarding the withdrawal of tax at source on daily necessities, he said that there is a provision of deduction of tax at source at the rate of 2.0 per cent on all agricultural products including rice, wheat, flour, and pulse.
Imposition of the tax burden on essential goods adversely affects the purchasing power of the common man, he pointed out.
The leaders of the professional organizations said that after the end of the financial year, the conditions of the Income Tax Act are relaxed or facilitated; it is not very useful for the taxpayers.
They also urged to set a limit on the capital of the company in case of borrowing from abroad.
In response, NBR chairman Abu Hena Md Rahmatul Muneem said modernization of revenue management is going on. NBR believes in bringing change slowly and sustainably without forcing any policy on people in haste.
