The Metropolitan Chamber of Commerce and Industry yesterday urged the government to pay special attention to banking sector management in the budgetary measures for next fiscal year.
“Almost all the banks are suffering from liquidity shortage. A big problem will arise unless this is overcome,” said MCCI Vice-President Golam Mainuddin at a discussion held at the National Board of Revenue headquarters.
The NBR organised the event to listen to the views and recommendations of the trade body as part of its exercise to consult with various stakeholders ahead of formulating the fiscal measures for the incoming year.
The MCCI suggestion comes at a time when the banking sector is encumbered by various loan scams and some banks are going through a cash shortage owing to lending above the permissible limit.
To rescue the banks, the government recently took a host of measures, undoing some of the contractionary intent of the monetary policy announced earlier in January.
The trade body also urged for cuts in import tariff on basic raw materials and intermediate goods to enhance competitiveness of domestic industries and abolition of the taxmen's discretionary authority.
It also suggested cuts in tax for high-income individuals from 30 percent to 25 percent and called for a hike in the tax-free income limit.
“We expect the government to frame an intelligent budget to face the ongoing problems faced by the economy,” Mainuddin said, adding that many consider the budgetary measures will be framed keeping in mind the upcoming election.
He went on to express hope that the government will prepare the budget taking into account the advancement of the country -- and not the election.
The trade body, citing the ballooning shortfall in revenue collection from target, said it has seen in the past that the revenue administration imposed higher tax burden on the firms and individuals under the Large Taxpayers' Unit to make up the deficit.
“This is a kind of punishment for compliant firms like us. Firms under the LTU consider it as unjust and it will discourage firms from coming under purview of the LTU,” the MCCI said. Businesses also wanted an end to the practice of double-taxing dividend income.
In response, NBR Chairman Md Mosharraf Hossain Bhuiyan said his office will focus on framing tax measures keeping the suggestion in mind.
He said he has already discussed the issue with Finance Minister AMA Muhith.
“We are trying to find out a formula. Tax should be payable only once.”
The tax administration will also work on easing the refund mechanisms for taxes paid in excess through the advance income tax, he said.
“Many have told me about the hassles in getting refunds. We try to adjust the refundable tax with the successive return. But when this cannot be adjusted, we allow refund subsequently. The process is a bit slow.” Protection for local industries will be ensured next fiscal year.
M Anis Ud Dowla, committee member of the MCCI and the chairman of ACI, demanded withdrawal of trade VAT on superstores and advance income tax on imports.