The chamber also demanded withdrawal of minimum tax for companies and imposition of tax on actual taxable income
Foreign Investors' Chamber of Commerce and Industry (FICCI) on Monday suggested the government to reduce corporate taxes by 5 percent for all categories of businesses in the next budget.
It also proposed changes in fiscal measures on prospective-basis.
The chamber that contributes 30 percent of the total exchequer revenue also sought imposition of VAT (value added tax) on transaction value instead of base value.
It also urged the government to follow the Customs Valuation Rules-2000 for ascertaining assessable value of all imported goods.
A FICCI delegation, led by its vice president and also Chief Executive Officer (CEO) of Unilever Bangladesh Kedar Lele, placed the budget proposal for the fiscal year 2020-21 to the National Board of Revenue (NBR) chairman.
Naser Ezaz Bijoy, CEO of Standard Chartered Bank, Md Mahtab Uddin Ahmed, CEO of Robi Axiata, and TIM Nurul Kabir, executive director of FICCI, among others, were present in the pre-budget meeting.
FICCI leaders said all changes including that of tax rates through the Finance Act should be made applicable prospectively.
"The clause of allowance of bad debt provision that was withdrawn from the assessment year 2007-08 corresponding income year 2006 should be reinstated which with a clear guidance as to what would be the base of bad debt allowances," the FICCI proposal reads.
The chamber also demanded the exclusion of 'supply which constitutes cost of goods sold' from the Tax Deducted at Source (TDS) or define the base amount of withholding tax based-on actual earning pattern.
The FICCI suggested the inclusion of a provision -- if the withholding taxes are higher than the actual legitimate tax liability, the NBR can exempt the tax to that extent.
The chamber leaders also sought withdrawal of excess perquisite tax citing that it is already taxed in the hand of employee.
"As first step, house rent, conveyance, leave fare assistance should be removed from the definition of perquisite or limit should be fixed at Tk1 million per annum per person," the FICCI proposal also reads.
The chamber also demanded withdrawal of minimum tax for companies and impose tax on actual taxable income.
On VAT-related proposals, the FICCI leaders sought removal of ambiguity on central registration, withdrawal of Advance Tax for raw materials and reduce it to three percent for other products.
They also sought removal of Supplementary Duty for all products, except health hazardous and luxuries one.
On customs wing, the chamber recommended the government to allow the importers to release goods, in case of disputes, through giving bank guarantees for only the disputed amount.
It also sought inclusion of all ancillary items related to capital machinery under the same approval process.
The FICCI also demanded single approval process in all ports to allow import of capital machinery and remove time bar for the same.