Tax on retained earnings to discourage FDI

Staff Correspondent

19 June, 2019 12:00 AM printer

Foreign investors in Bangladesh apprehended that 15 per cent tax on retained earnings, imposed in the proposed budget, would discourage foreign direct investment in the country.

They made the apprehension at the luncheon programme of Foreign Investors' Chamber of Commerce & Industry (FICCI) held at a city hotel on Tuesday.

Gracing the event as chief guest, National Board of Revenue (NBR) Chairman Mosharraf Hossain Bhuiyan said that the government tried its best to make a business and investment friendly budget and if there is any inconsistency, NBR will review it.

In his speech, FICCI president Shehzad Munim said the proposed budget for fiscal year 2019-20has imposed 15 percent tax on retained earnings which makes foreign investors worried.

He also said that foreign investors will have to face challenge for the additional tax while some may not be able to take the tax burden.

Proposing the NBR chairman to take six more months in implementing VAT law, Shehzad Munim said that some more time is required for the companies and supply chain to cope with the VAT structure under the new system.

FICCI president also thinks that 2 percent from existing 0.75 percent on turnover of telecom companies and 7 percent VAT on e-commerce business is not consistent with the government’s digitization vision and sought review on the proposal.

Terming the budget as investment and business friendly, NBR Chairman said the government has proposed set of tax facilities for economic zones, high-tech park, agriculture and other sectors.