Cut reliance on customs duty for revenue: ICAB

Bangladesh needs to reduce its dependence on customs duty for revenue as lowering the cost of doing business would help local products and services become more competitive on a global scale, according to the Institute of Chartered Accountants of Bangladesh (ICAB).

Customs duties currently make up about 29 per cent of the government's total revenue.

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"We believe our proposal will contribute to the country's economic development and accelerate the journey towards achieving its development targets," said ICAB President Md Shahadat Hossain.

Besides, this will facilitate Bangladesh's transition into a middle-income country, he added.

ICAB made this proposal to the National Board of Revenue (NBR) during a discussion on the upcoming national budget at the latter's conference room yesterday.

ICAB's national budget proposals are divided into four parts: proposals regarding an increase in revenue and income tax ordinance, reduction of contradictions in the law and ensuring transparency in its implementation, giving more impetus to investment activities, and preventing capital smuggling.

"The main purpose of our proposals is to increase the government's revenue. We also aim to assist the NBR in tax management, preventing tax evasion, increasing tax coverage, and addressing inconsistencies in existing laws," Hossain said.

He went on to say that Bangladesh's economy is involved in global price changes and political developments.

In addition, challenges await after its graduation from a least developed country in 2026, Hossain said.

The e-TIN must be linked to the Bangladesh Road Transport Authority, the land records office, and city corporations to ensure that all assets are reflected in a taxpayer's return, ICAB proposed.

ICAB said such automation will ensure that potential taxpayers are brought under the tax net as they will be encouraged to file their returns online without any hassle.

With this type of automation process, taxpayers will not face any difficulty in getting their outstanding tax credit.

Digitisation is required for all tax processes, including filing returns, tax assessments, appeals and tribunals, ICAB said.

ICAB also proposed adding a section on skill development for VAT officers to the existing VAT Act.

VAT is a transaction based system. The VAT registered person has to submit the tax by updating the accounts on a monthly basis.

The current VAT Act also makes it mandatory for a registered person to submit an audited account statement.

For these reasons, there is a need to develop the skills of VAT officials and so, the NBR could work closely with various professional bodies to this end, the professional accounting body said.