Emphasising fiscal incentives for country’s productivity, the metropolitan chamber has urged the government to bring about some reforms in the taxation. It suggested that the tax officials should be stripped off discretionary powers as such powers have been misused for which the effective tax rates for companies on an average went up by 10 to 12 per cent.

The Metropolitan Chamber of Commerce and Industry opposed the provision of whitening black money saying MCCI strongly feel that whitening of black money is an unfair provision as those who do not care to pay tax are provided with concessions. The suggestions came on March 18 at the chambers pre-budget meeting with the chairman and members of the National Board of Revenue (NBR). MCCI President Latifur Rahman led his side at the meeting.

The proposals put forward by the chamber included a three-tier import duty structure that aimed to improve competitiveness of the local industries, such as 2.5 percent duty for basic raw material, 7.5 percent for intermediate raw material and 22.5 percent for semi and finished products. Reduction in corporate tax rate, different tax rates for financial institutions, taxation of private limited companies and dividend amounts are some of the points that came up in the MCCI-proposed tax reforms.

Country’s tax system continues to remain afflicted with high rates and low tax bases. By now, it is well established throughout the world that moderate tax rates and transparent procedures hold key to improved tax compliance , the MCCI remarked in its budget proposal.

It recommended reducing taxes on raw materials and components, intermediary products and finished products. Without a major reduction in the customs duty on raw materials/ components and intermediary products, the local industry will continue to be affected, it noted.

The chamber also suggested reducing corporate tax in the case of non publicly traded companies, lowering tax rate for offshore banking units and refixation of the ceiling of tax-free house rent allowance. It pointed out that the provision under the Finance Act 2006 which described the expenditure on foreign tour by company directors as an income from other source is irrational and unjustified. The chamber demanded for allowing a limitless expenditure on such foreign trips.

Terming the introduction of the advance corporation tax on credit card payments a deterrent in trying to move the country away from a cash economy, the MCCI recommended withdrawal of such tax in the greater interest of economic development. It asked for removal of infrastructure development surcharge, license fees, VAT on automatic teller machine, duty on infant formula and cereals and supplementary duties on milk powder at production level.

It also proposed to minimise the customs duty gap between the completely built unit television, refrigerator and air conditioner and completely knocked down units from 25 percent to 20 percent to make assembly operation economically viable. Reduction in customs duties on raw materials, such as mixture of odoriferous substances, coconut oil, soap noodles, white petroleum jelly, caustic soda and caustic potash were also suggested.

The chamber, however, proposed a number of reforms in value added tax provisions that included withdrawal of VAT on export registration samples. A delegation of Metropolitan Chamber of Commerce and Industry (MCCI), headed by its President Latifur Rahman, meets the chairman and members of the National Board of Revenue (NBR) in Dhaka yesterday to discuss the chambers proposals for the next budget