Align tariffs in line with WTO rules to face challenges post-LDC

The government should make the revenue administration dynamic and rationalise tariffs with a view to tackling potential challenges Bangladesh might face following its graduation from the grouping of the least-developing countries, said the Economic Reporters' Forum (ERF) today.

The country's largest platform for financial journalists made the demand while presenting its budget proposals to the National Board of Revenue (NBR) at the latter's office in the capital's Agargaon.

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"The preparatory work to implement tariffs compliant with World Trade Organisation's rules should begin from the next fiscal year. Besides, the capacity of domestic industries will have to be enhanced so that they can compete at both domestic and international markets in the post-LDC era," said Mohammad Refayet Ullah Mirdha, president of the ERF, who presented the proposals.

The association cited that the tariff rate in Bangladesh is far higher than the average tariff rate in the LDCs and the protective tariff averages 28 per cent.

"We are requesting to bring the rates down so that the revenue generation does not face troubles after signing trade agreements," it said.

The ERF said the government would have to enact the Customs Act and the Income Tax Act and pass them in parliament to begin their implementation from July 1, in line with recommendations from the International Monetary Fund.

But it has to be taken into account so that the common people don't see any additional tax burden and the country's business sector doesn't witness any negative impacts, it said.

The association suggested raising the tax-free income limit to Tk 5 lakh to provide some relief to people going through a higher cost of living.

It also called for expanding the tax net and ensuring tax compliance through automation instead of raising tax rates since the government would have to generate more revenues to elevate the country's tax-to-GDP ratio by 0.5 percentage points in the next fiscal year and by another 0.5 percentage points and 0.7 percentage points in the following two years.

The ERF said there have been long efforts to roll out a national single window to facilitate businesses. There has been no visible progress to that end despite the government's willingness and the business community's interest.

"The national single window should be launched as soon as possible and all NBR services should be included in the Bangladesh Investment Development Authority's one-stop services. There have to be arrangements so that all services can be provided online."

The association called for an assessment report on the tax exemption provided by the government, outlining the benefits they bring to the economy. This will help see the rationality of the exemptions and take corrective measures, if necessary.

It said the advance tax refund system has to be strengthened. "If people get refunds quickly it would widen the tax payment tendency among people."

The association demanded 100 per cent digitalisation of the revenue system with a view to establishing a revenue administration that is free of harassment and corruption.

It pointed out that the electronic cash register machines that have been supplied since 2008 have not been used properly.

Later the NBR moved to electronic fiscal devices but businesses are not using them appropriately either. So, the NBR would have to put emphasis on their use instead of just ensuring their supply, it said.

The ERF called for beefing up monitoring so that foreigners can't work in Bangladesh illegally after arriving on a tourist visa. This will prevent capital outflow.

It said bonded warehouse facilities should be extended to other export-oriented industries like the garment sector. 

Investments aimed at green industrialisation have to be promoted while the wealth surcharge has to be increased from the current level, according to the association. 

NBR Chairman Abu Hena Md Rahmatul Muneem also spoke. 

Abul Kashem, general secretary of the ERF, was present.