Dhaka: The Dhaka Chamber of Commerce and Industry (DCCI) has proposed a uniform single-digit VAT rate across all sectors, along with a nominal 1% VAT for informal sector traders in the upcoming fiscal year 2025-2026 budget. This proposal aims to enhance transparency in revenue management, reduce business costs, and positively impact the manufacturing sector.
According to Bangladesh Sangbad Sangstha, the DCCI highlighted that the current standard VAT rate of 15% is divided into various slabs such as 10%, 7.5%, and 5%, creating difficulties and disputes for traders. The lack of input tax rebate benefits adds to the burden of additional taxes on many traders. These recommendations were submitted by DCCI President Taskeen Ahmed to NBR Chairman Md Abdur Rahman Khan during a pre-budget meeting at the NBR Building.
This year, Taskeen Ahmed presented 42 budget proposals focusing on widening the tax net, reducing tax rates, introducing business-friendly tax policies, automating revenue systems, and reforming VAT management. The proposals also emphasized protecting local industries, simplifying import duties, and restructuring the tax system for individuals. Ahmed applauded the NBR’s initiative to transition all taxpayers to an online income tax return process in the next fiscal year.
The DCCI President proposed setting short, medium, and long-term targets for increasing taxpayers and expanding the tax net. He suggested introducing an automated tax return system for corporate entities and raising the tax-free income limit for individuals from Taka 3.50 lakh to Taka 5 lakh, considering the inflationary situation. Ahmed also recommended gradually reducing advance tax at the import level for commercial importers and phasing out existing advance tax for manufacturers.
Md Abdur Rahman Khan, NBR Chairman, emphasized the need for trade and investment expansion through gradual reforms in trade-related revenue policies. He noted that while the number of TIN holders has increased significantly over the last decade, the growth in taxpayers has not matched expectations. Khan mentioned ongoing efforts to transition the corporate tax return system online and stressed the importance of reducing corporate tax rates to encourage the transformation of individual enterprises into corporate entities.
Regarding VAT rates, Khan expressed the government’s willingness to implement a single-digit VAT rate if the business community reaches a consensus. He stressed the importance of accountability and transparency among businesses. Khan proposed developing integrated software, utilizing local IT expertise, to streamline accounting, audits, and tax submissions, allowing central but online access to TIN and BIN holders’ databases. He also indicated potential leniency in the tax rebate system for the next fiscal year.
DCCI Senior Vice President Razeev H Chowdhury and Vice President Md. Salem Sulaiman were also present at the meeting.