The Dhaka Chamber of Commerce and Industry (DCCI) is expecting the government of Bangladesh to cut tax rates in phases for the next three years. The chamber has sought 2.5 per cent rate cut in the country’s national budget for fiscal 2021-22, an additional 2.5 per cent in fiscal 2022-23, followed by another 2.5 per cent in fiscal 2023-24.
The chamber recently submitted a plan to the National Board of Revenue (NBR), suggesting tax rate cuts in the next three budgets, according to Bangladeshi media reports.
The corporate tax for non-listed firms was reduced to 32.5 per cent from 35 per cent in the last fiscal budget, while the tax rate for publicly traded companies continued to be at 25 per cent. However, the corporate tax rates in the country are higher in comparison to the neighbouring countries like India (25.2 per cent), Pakistan (29 per cent), Sri Lanka (28 per cent), Vietnam (20 per cent), Indonesia (20 per cent) and Myanmar (20 per cent).
The DCCI has also suggested reducing the time taken to process VAT rebates for businesses from three months to one month. It is also rooting for an exemption from paying VAT at source for businesses that pay 15 per cent VAT. An exemption on advance tax on import (AIT) of industrial raw materials and capital machinery has also been proposed by the chamber.
Bangladesh government will announce the budget for fiscal 2021-22 on June 3. The size of this budget is likely to be Tk 6 trillion.