FICCI’s post-budget position paper indicates
FE REPORT |
Jun 23, 2022 8:51:32 a.m.
June 23, 2022 3:04:34 p.m.
The Foreign Investors Chamber of Commerce and Industry (FICCI) on Wednesday suggested some changes to the conditions attached to the proposed 2.5 percent corporate tax cut.
He also urged the government to revoke the provision, proposed in the Finance Bill 2022, imposing a tax on a company’s contribution to the Workers’ Profit Sharing Fund (WPPF).
The tax on the WPPF contribution will ultimately increase the corporate tax burden and likewise increase the effective tax rate, the chamber said at a news conference at a city hotel.
The trade body expressed concern over a few measures proposed in the national budget for the financial year 2022-23 and demanded they be revised to make the tax provision potentially business-friendly, given the likely implications on businesses and investments. strangers.
“We understand that the contribution to WPPF has been proposed as an ineligible expense based on the idea that it is a profit distribution of after-tax profit like a dividend, when in fact it s This is a statutory payment for the benefit of employees, which is paid from pre-tax profit in accordance with the law,” according to FICCI’s post-budget position paper.
FICCI said such a levy is inconsistent with the favorable fiscal environment the government has tried to build over the years, and is a diversion from the current provision of the Labor Act 2006.
She proposed to include this provision in section 29 as an eligible expense instead of section 30 of the 1984 Information as an ineligible expense.
The trade body also recommended some changes to the conditional 2.5 per cent corporation tax reduction.
In accordance with the Finance Bill 2022, certain types of listed companies that have issued more than 10% of their shares through an IPO will benefit from the reduced tax rate.
FICCI proposed to modify this provision by clearly stating that at least 10 percent of the shares of a listed company must be held by the public to benefit from such a reduced rate.
He also proposed that the provision relating to the collection of all receipts through banking channels be amended and that the law authorize the collection of at least 50% of receipts through banking channels to benefit from such a tax rate. reduced.
“From next year, the ceiling can be gradually increased by 10%,” the foreign affairs chamber said, demanding, “All investments and expenses exceeding 1.2 million taka must be paid through banking channels. “.
The FICCI proposed that Article 30 of the ITO 1984 be amended to remove the contradiction and that the NBR authorize the payment of at least 10% of business expenses through the non-bank channel to benefit from such a rate reduced tax.
Naser Ezaz Bijoy, CEO of Standard Chartered Bank and Chairman of FICCI, said the growth of multinationals will slow down with the disclosure of some of the provisions which will further discourage local and foreign investment.
“We hope the recommendations will be taken into consideration and enable the chamber to extend its continued support to the government of Bangladesh and work together for the development of the country by developing a favorable fiscal environment,” he said, while presiding over an event.
Among others, Rupali Chowdhury, adviser to the advisory board of FICCI and managing director of Berger Paints; Zaved Akhtar, Director of FICCI and Managing Director and CEO of Unilever Bangladesh Ltd. ; Shehzad Munim, Advisor to the FICCI Advisory Board and Managing Director of British American Tobacco Bangladesh Co. Ltd. ; Deepal Abeywickrema, FICCI Director and Chairman of FICCI Tariff, Tax and Regulatory Affairs Committee and Managing Director of Nestle Bangladesh Ltd. ; Sazzad Rahim Chowdhury, Tariff, Tax and Regulatory Affairs Committee Coordinator and Chief Financial Officer of Berger Paints Bangladesh Ltd. was present at the event.
The program was moderated by TIM Nurul Kabir, Executive Director of FICCI.