Written by The Banking Post
The Metropolitan Chamber of Commerce and Industry has urged tax authorities to make the upcoming national budget supportive rather than burdensome, as businesses grapple with high borrowing costs and a persistent dollar shortage.
At a pre-budget meeting, MCCI leaders handed proposals to the National Board of Revenue, calling for a shift toward policies that ease pressure on industries—especially small and medium enterprises.
“At a time when high interest rates of 12% to 14% and dollar shortages are driving up raw material import costs, small and medium entrepreneurs are bearing the heaviest burden,” the chamber said, stressing that the next budget should prioritise relief over restriction.
The business body noted that while its members contribute nearly half of national revenue, the overall tax system remains strained by structural weaknesses. Despite more than one crore registered taxpayers, fewer than half file returns regularly.
To widen the tax base, MCCI proposed a symbolic minimum tax—ranging from Tk 100 to Tk 1,000—and a simplified one-page digital return system accessible via mobile apps, aimed at bringing informal workers into compliance.
The chamber also flagged the gap between nominal and effective tax rates. It said advance income tax, tax deducted at source and other measures push the real tax burden on many firms to 40–50%, far above headline rates. It recommended cutting corporate taxes and shifting fully to income-based taxation instead of turnover-based methods.
On reform, MCCI called for a unified digital platform combining income tax, VAT and customs, along with automated input tax credits and online hearings to improve efficiency and reduce compliance costs.
It also urged simplification of the Primary Source Rule, arguing that its application across dozens of categories complicates business operations and raises compliance burdens.
On taxing high-income earners, the chamber warned against rate hikes, saying they could discourage compliance and trigger capital outflows. Expanding the tax net, it argued, would be a more sustainable path to higher revenue.
For SMEs, MCCI proposed a dedicated tax framework, including lower turnover taxes, easier access to input tax credits, and reduced VAT and duties on raw materials to cut production costs and boost competitiveness.
The chamber also welcomed ongoing tax reforms and called for clearer direction on policy changes, including separating revenue policy from administration to improve transparency and predictability.
