ICMAB for withdrawing tax at source on essentials

The Institute of Cost and Management Accountants of Bangladesh (ICMAB) has proposed for keeping all sorts of agro-based and essential items out of the purview of tax at source in the budget for the next fiscal year (FY24).

They also proposed for making mandatory the provision for appointing local agents for bringing under tax the income of the popular global IT and social media giants like Google and facebook.

The ICMAB leaders said this while presenting a set of proposals before the National Board of Revenue (NBR) in a pre-budget meeting held at the NBR building in the capital's Agargaon area, reports BSS.

Apart from ICMAB, Bangladesh VAT Professional Forum and Ernst and Young Services Limited also took part in the pre-budget meeting. NBR chairman Abu Hena Md Rahmatul Muneem presided over the meeting.

Speaking on the issue of imposing tax on income of digital economy, ICMAB president Md Abdur Rahman Khan said that as per the Income Tax Act, there is no provision for bringing any foreign company under tax if there is no permanent office of that company in Bangladesh.

But, due to the technological innovation and excellence, the foreign companies are doing their business through digital platform without keeping any permanent structure in the country.

If it is made mandatory for keeping local agent in the Income Tax Act like the VAT Act, then the foreign companies would keep local agents and thus those would be considered as their local establishments. In this process, they would be compelled to pay tax on their income in Bangladesh.

Regarding the proposal for withdrawing tax at source on essential items, the ICMAB president said that there is a provision for imposing tax at source at 2 percent on essential items like rice, pulse, flower and all sorts of agricultural items. 

The ICMAB also proposed for raising the tax free income ceiling for individual taxpayers to Taka 7 lakh instead of the existing Taka 3 lakh.

Speaking on the occasion, the NBR chairman said that work is going on to modernize the revenue management. "NBR believes in not imposing any policy on the commoners in a hustle, rather to bring changes gradually in a tolerable way."