To improve the nation’s revenue collection and foster an environment that is favorable to taxpayers, reforms are required. These changes must be inclusive, though. They must be carried out while taking stakeholders’ perspectives into consideration and keeping in mind reality. Therevenuesector’sreforminitiativeswon’tlastatalliftheyarenotinclusive. Nevertheless, many goods and services now have higher taxes without stakeholder consultation. This has led to a crisis in a number of industrial and service sectors. Employment and investment are being impacted by this. Instead of raising government revenue, this is probably going to decrease it.
These were the words of the speakers at a roundtable discussion organized by Policy Exchange Bangladesh at a hotel in the capital on Wednesday. The discussion titled ‘Managing the Tax Policy Framework: Implications and Priorities for Important Sectors’ was attended by National Board of Revenue (NBR) Chairman Abdur Rahman Khan. The event was moderated by Policy Exchange Bangladesh Chairman and Chief Executive Officer (CEO) Mashrur Riaz.
The speakers discussed the recent tax policy changes in the agro-processing, energy, tobacco and consumer goods sectors and their impact. They said that the recent tax increases in various sectors are having a negative impact on the government’s revenue collection, the country’s trade and commerce and foreign investment. Therefore, they emphasized on formulating inclusive policies in the interest of economic stability and increasing revenue collection.
NBR Chairman Abdur Rahman Khan said, “The government is committed to ensuring a tax system that will support economic growth and maintain financial discipline. The goal of our tax policy is to create a balance between revenue collection and business growth. We understand the concerns of the industry leaders. We will continue to strive to create a fair tax structure to increase investment and revenue collection and ensure long-term economic stability.”
Abdur Rahman Khan also said, “Tax policy needs to reflect the changing economic reality. Stakeholder involvement in the decision-making process is very important.’
Kamran T Rahman, President of Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, called for a constructive dialogue between policymakers and businessmen before making any major changes in tax policy. He said, ‘Close cooperation between the NBR and the industry sector is required to create a sustainable tax structure. Policy changes without discussion or consultation can create economic instability.’
Manisha Abraham, Managing Director (MD) of British American Tobacco Bangladesh (BATB), said, ‘The cost of legal business in the country is increasing. At the same time, the overall business is being negatively affected due to the imposition of additional taxes. The total duty and tax on tobacco has increased to 83 percent, which is higher than the 75 percent recommended by the World Health Organization (WHO). Due to this, a favorable environment is not being ensured for legal businessmen. Therefore, tax policy needs to be changed.’
Manisha Abraham said, ‘We want foreign investment to increase. For that, a favorable environment is needed. It is possible to get that favorable environment by discussing with stakeholders on policy-making issues.’ She said that BATB is ready to assist in any reform activities with the NBR. However, those reforms need to be based on discussions with stakeholders.
Ahsan Khan Chowdhury, Chairman of PRAN-RFL Group, said that foreign investors are losing interest due to frequent changes in tax rates. All types of investors, domestic and foreign, want an investment-friendly tax structure and policy continuity. If that is ensured, growth will accelerate along with bringing relief to the economy.
Paul Holloway, Managing Director of Japan Tobacco International (JTI), said that recently, taxes on various products and services have been suddenly increased without discussing with stakeholders. Due to this additional tax, the illegal cigarette trade may increase. At the same time, income and employment in this sector will decrease. This will ultimately affect the government’s revenue collection from the tobacco sector, which pays the highest tax.
Former NBR member and member of the NBR Reform Committee Farid Uddin said, “The committee has talked to the stakeholders. We will present the information we have received to everyone. We have also given several recommendations.”
Dainik Samakal’s associate editor Zakir Hossain said, “Whatever is done about taxes, it should be discussed with the stakeholders first. Then it will be better for everyone.”
Also present at the event were Bangladesh Investment Development Authority (BIDA) Director General Md. Ariful Haque, Nestle Bangladesh Company Secretary and Head of Legal and Taxation Debabrata Roy Chowdhury, LafargeHolcim Bangladesh Director and CEO Iqbal Chowdhury, Institute of Cost and Management Accountants of Bangladesh (ICMAB) President Mahtab Uddin Ahmed, among others.
Other recommendations made by speakers at the event included reconsidering tax increases in various sectors, including tobacco, forming a tax reform committee with stakeholders, and ensuring consistency in corporate tax rates and stability in tax policy.
