The Dhaka Chamber of Commerce and Industry (DCCI) yesterday urged the government to cut the corporate tax rate by 2.5 percentage points over the next fiscal year to bring it in line with the regional average rate.
“If the government reduces the corporate tax rate, it will stimulate local and foreign investment,” DCCI Chairman Rizwan Rahman told a news conference at the chamber’s office in the capital.
The corporate tax rate in Bangladesh is 30%, while the average rate is 29% in Pakistan, 24% in Sri Lanka and 20% in Vietnam, Cambodia and Thailand, according to a DCCI document.
Rahman said that after Bangladesh leaves the group of least developed countries, the cost of doing business will increase and the tariff will increase by at least 6-7%.
“So we should consider diversifying products and markets.”
Bangladesh’s main export destinations are Europe and the United States, which account for almost 67% of total shipments, while Africa and the Middle East are untapped.
“But after graduation from LDCs, our exports will face challenges. We need to formulate an export diversification strategy engaging all stakeholders to address the challenges,” Rahman said.
Tariff rationalization, reduction of non-tariff barriers in cross-border trade and minimization of anti-export biases are also important in this regard, he said.
The head of DCCI focused on the automation of global taxation, value added tax, audit, arrears management, inquiries and inquiries, appeals, management revenue accounts, taxpayer account management and revenue information management.
He called for ensuring convenience, transparency and fairness in the Income Tax Act 2022 to make it business-friendly and simplify the VAT refund process.
“Only automation can eliminate corruption and hassle and ensure transparency and accountability.”
According to the chamber, private investment fell to 21.25% of GDP in 2020-21.
In order to boost private investment and attract foreign direct investment, the DCCI suggested streamlining the corporate tax structure and preparing economic zones.
Rahman said small and medium enterprises, micro, small and medium enterprises should be given priority, especially in terms of easy access to finance.
To meet the growing demand for skilled labour, he called for more investment in research and development, retraining and upskilling.
He said shipbuilding, tourism, sustainable fishing, gas and mining exploration are grossly underutilized.
In order to have a strong position in economic diplomacy, the entrepreneur suggested developing negotiation skills on international trade, issues related to the World Trade Organization and international laws relevant to free trade agreements. win-win and preferential trade agreements.
DCCI Senior Vice President Arman Haque and Vice President Monowar Hossain were also present at the event.