Sohel Parvez

The National Board of Revenue (NBR) has relaxed rules regarding value-added tax (VAT) registration of manufacturing entities operating in Bangladesh, a move welcomed by the businesses as it would reduce their cost of compliance. 

The current flooding in Sylhet has caused losses of more than Tk 140 crore for the local aquaculture industry, with farmers in Sunamganj district being the worst affected, according to a preliminary estimate by the Department of Fisheries (DoF).

The 2.5 percentage points corporate tax rate cut will encourage firms in Bangladesh to move away from cash transactions, said Naser Ezaz Bijoy, president of the Foreign Investors’ Chamber of Commerce & Industry (FICCI).

The National Board of Revenue (NBR) has broadened and relaxed the rules for bringing new taxpayers under the tax net by assessing their incomes on the spot.

From the next fiscal year, government agencies, implementing authorities of various publicly funded projects and corporate entities will come under greater scrutiny of taxmen as the National Board of Revenue has toughened rules to plug scope of avoidance regarding withholding tax deductions and payments. 

Until the current fiscal year, a bank account-holder requires paying a 10 per cent withholding tax on the interest earnings on deposits if the individual furnishes banks with the taxpayer identification number (TIN).

The production cost of steel makers in Bangladesh is going to increase as the revenue authority seeks to hike the value-added tax on rod and other steel products by up to 20 per cent, two leading producers said yesterday.

The government has cut its target on food distribution, which supports poor and low-income people, by 5 per cent to 30.95 lakh tonnes in the next fiscal year from the revised budget of 2021-22, finance ministry documents showed.

Over the last couple of months, various sections of society called upon the government to raise the tax-free income limit amid the rising cost of living.

People will require to submit the proof of submission of their income tax returns in order to get more than 40 types of services, including loans and trade licence, as the National Board of Revenue looks to raise more taxes.

From the next fiscal year, the tax authority is going to introduce a provision of disconnecting utility services of taxpayers for their failure to pay undisputed revenue demand of the government.

In the proposed tax measures, the tax authority wants to impose 50 per cent tax on the interest earnings if the account holder fails to submit proof of submission of tax returns.

Global tech giants such as Google and Facebook are likely to come under the tax net from the next fiscal year as the authorities plan to make submission of returns mandatory for the firms that have no physical presence in Bangladesh but are doing business here.

In the wake of surging production costs resulting from high feed prices, the appetite for farming to produce chicken meat is waning among farmers as the demand for chicks declined, poultry industry operators said yesterday.

Coronavirus infections have declined significantly. But the world is yet to fully recover from the health crisis. Recently, the war in Ukraine has created worries of a global food crisis and fears of a recession in major economies as inflation rages.

Exporters of all sectors will likely get corporate tax rates equal to that of garment exporters from the next fiscal year, said officials of the finance ministry, which plans to encourage the diversification of Bangladesh’s export basket by affording this benefit.

On April 5, the revenue authorities held a draw of the lottery of sales receipts issued by the stores using electronic fiscal devices (EFDs).

The National Board of Revenue should accelerate the use of electronic fiscal devices (EFDs) and ramp up monitoring to eliminate non-compliance with a view to raising more value-added taxes using technologies, said former top taxmen and economists.

Bangladesh may find it difficult to avoid the middle-income trap and become a high-income country if it can’t bring in the second generation of policy reforms and focus on the quality of macroeconomic management, said Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue.

Bangladesh’s budget as a percentage of national income has been falling consistently for the last four years although the economy has grown, reflecting its inability to generate enough revenue and spend enough on social sectors.