Bangladesh Merchant Bankers Association (BMBA) and other financial institutions have proposed to increase the investment opportunity of undisclosed income in the capital market with a reduced tax rate in the next budget.
The BMBA leaders also proposed a cut in corporate tax for non-life and life insurance companies by 35 per cent and 30 per cent respectively.They made the proposals at a pre-budget discussion for FY 2021-22, organized by the National Board of Revenue (NBR) on Thursday.
Representatives of financial institutions including merchant banks, insurance, leasing companies, Dhaka and Chittagong Stock Exchange took part in the pre-budget discussion and submitted written proposals to NBR on behalf of their respective sector.
NBR chairman Abu Hena Md. Rahmatul Muneem told the discussion that they were working to bring transparency in revenue collection in the entire sector by increasing cooperation among businessmen and the revenue authority.
“We believe that cooperation will make the job of NBR easier,” he said.
Regarding the proposal of BMBA leaders, the NBR chairman said, “Financial institutions are very important in the budget. NBR believes that they have been playing an important role in increasing revenue collection. We will seriously consider your proposals in the next budget.”
BMBA president Sayedur Rahman said, “NBR’s decision to allow investment undisclosed money has helped increase investment in the capital market. So we are proposing to reduce the tax rate from 10 per cent to 5.0 per cent on the undisclosed money to be invested.”BMBA also recommended fixing the corporate tax rate for merchant banks to 25 per cent, 10 per cent for listed companies and 20 per cent for non-listed companies.
Bangladesh Insurance Association (BIA) has proposed to reduce corporate tax, withdraw the provision of 5 per cent advance tax payment for insurance agents for two years considering the coronavirus along with the deduct gain tax on the profits of life insurance policyholders. NBR member (income tax policy) Md Alamgir Hossain, member of the customs and VAT administration Saiful Islam, member of the VAT policy Masud Sadiq and leaders of the associations of banks, insurance and other financial institutions, among others, also took part in the discussion.