Planning Minister AHM Mustafa Kamal has said that higher tax rates are one of the reasons for low-revenue collection by Bangladesh's National Board of Revenue. Speaking at a program of the Bangladesh-German Chamber of Commerce and Industry or BGCCI, Kamal said on Thursday said he suggests reducing the income tax to as low as 10 percent from the current 35 percent.
Citing Vietnam and Singapore as examples where the tax rate is 15 percent, he said, "Then why our people would pay 35 percent income tax."
"If we can make the rules easier and reduce the rate, then we can collect more revenues," he said, adding that the tax collection would double if it is 10 percent. "You have to come to equilibrium. It has to be a win-win situation," he said, while arguing in favor of his strategy, reports bdnews24.com. The BGCCI organized the luncheon meeting with the theme on "Emerging Bangladesh: Business Friendly Policies and Plans" with its President Omar Sadat in the chair.
Executive Chairman of Bangladesh Investment Development Authority Kazi M Aminul Islam also spoke at the function as a special guest. "We will give item-wise export incentive. We will make it more competitive." Citing the World Economic Forum report, the BGCCI president said infrastructure, land acquisition, financing, inefficient bureaucracy, and inefficient workforce are some of the reasons that stand in the way of drawing foreign direct investment to Bangladesh.
Sadat, also a lawyer by profession, said one of his German clients three years ago while trying to invest in Bangladesh said: "Here your one-stop shop is full-stop shop". The BIDA executive chairman said that "things have changed now", referring to the measures he has taken to overhaul the investment climate in Bangladesh.
Bangladesh ranks 177th among 190 countries in the World Bank's Ease of Doing Business ranking. The BIDA has taken a major reform package to ease the process of doing business in Bangladesh which has attained a steady economic growth in recent years and eligibility of coming out of the LDC bracket recently.
With that ranking, Bangladesh has achieved 7.7 percent growth, Islam said. As Vietnam is drawing more investments than Bangladesh, he said the differences are in infrastructure, energy, gas and electricity.
With the massive infrastructure projects ongoing, he said things will be changed in five to 10 years."The electricity crisis is solved now," he said, adding that the energy and gas crisis would be over soon.He urged the private sector to take the lead in the government's effort to make the country a developed one by 2041.
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