Lowering penalty business friendly

The proposed reduction of the fine on businesses failing to pay value added tax (VAT) in the national budget for fiscal year 2022-23 will reduce operational costs, said The Institute of Chartered Accountants of Bangladesh (ICAB) yesterday. 

The fine was 100 per cent of the payable VAT and the National Board of Revenue's (NBR) proposal was to reduce it to 50 per cent.

The penalty reduction by the revenue authority is timely and business friendly, said the ICAB.

A corporate tax reduction for transactions through banks, operation of bonded warehouses electronically and equal tax rates for all exporters, 10 per cent for green businesses and 12 per cent for non-green ones, are also laudable, it added.

"The reduction of tax rates for all exporters will encourage diversification of exports," said ICAB President Md Shahadat Hossain sharing the platform's analysis on the June 9 budget at a press conference in its office.

"We appreciate that the proposed budget has focused on tax reform measures as we believe it will contribute to improving the tax-GDP ratio and increase revenue collection," he said.

The ICAB welcomed the proposed changes in source tax and its areas and changes in the definition of amalgamation, research and development.

Besides, separate provisions to facilitate startups will encourage creative ventures, he said.

The professional body of accountants said the government has taken up the challenge of implementing a development budget of Tk 246,066 crore for the next fiscal year amid domestic and global crises.

This is a very encouraging step for a developing country like Bangladesh to move forward, it said.

He said a joint initiative of the NBR and ICAB in setting up an automated document verification system to check the authenticity of audits of financial statements would facilitate the achievement of the revenue collection target.

Among others, former ICAB president Md Humayun Kabir and ICAB Chief Executive Officer Shubhashish Bose also spoke at the event.