BCI demands 3-year tax holiday for small industries

The Bangladesh Chamber of Industries (BCI) yesterday called for tax holiday for the cottage, micro and small industries for three years starting from the next fiscal year to help them grow.

"Later, a tax rate of 10 to 15 per cent could be levied," said BCI President Anwar-Ul Alam Chowdhury during a pre-budget discussion with the National Board of Revenue (NBR).

He placed the budget recommendations on behalf of the chamber at the meeting at the NBR headquarters in the capital. NBR Chairman Abu Hena Md Rahmatul Muneem was present.

Questions should not be asked about the source of funds up to Tk 2 crore to create new entrepreneurs and cottage, small and micro-enterprises, Chowdhury said in a written speech. 

All industries should have a tax identification number, and they should be registered with associations, chambers, the SME Foundation or the Bangladesh Small and Cottage Industries Corporation.

The chamber demanded the withdrawal of the tax at source on the import of industrial raw materials and scrapping of value-added tax on all utilities.

It called for VAT holiday if light engineering industries manufacture and sell machinery and VAT exemption on the imports of industrial raw materials.

Chowdhury said Bangladesh should reform customs and tax structures to put in place an investment- and industrial-friendly permanent tax and customs systems for national interests and for a smooth transition from the category of least-developed countries.

It sought to raise advance income tax, supplementary duty and regulatory duty on imported finished products. A 10 per cent regulatory duty should be imposed on the products that are yet to see such fiscal measure, the chamber said in a press release.

Data on the prices of goods and products should be collected regularly, and tax should be imposed in line with the rates. Besides, scanners and automatic weighing machines should be installed at all ports to put an end to the import of products through under-invoicing and mis-declaration, the BCI said.

In the industrial sector, the upper ceiling for annual taxable turnover should be raised to Tk 10 crore from Tk 3 crore. The turnover tax should be brought down to 3 per cent from 4 per cent.

"The scope to generate more VAT and create jobs is high in the industrial sector. The sector helps the economy earn foreign currencies through exports and save foreign currencies through reducing imports," said Chowdhury. 

The entrepreneur also called for granting rebates to encourage investment and industrialisation in the northern region and other impoverished parts of the country to ensure regional development and keep the wheel of the economy moving.       

The BCI demanded an increase in the tax-free income limit to Tk 4 lakh, taking into account inflation and living costs. It called for granting investment and income tax holiday to encourage technical and vocational course.

According to the chamber, the private sector accounts for about 64 per cent of health service in Bangladesh. In order to modernise the private health care segment, a separate budget should be unveiled, it said.

All investment directed at research and skills development should be tax-free, it said.

BCI Vice-president Priti Chakraborty and Director Shahidul Islam Niru were present during the meeting.