NBR incentive for stock market to stay

The authorities will continue the existing tax incentives offered for the capital market in the upcoming budget for fiscal year 2019-20, said the revenue board chief on Thursday.

He said the National Board of Revenue (NBR) is working on this as per the instruction of the Prime Minister.

“The PM is concerned about a worrying development in the capital market. We’re trying to fix this,” said Md Mosharraf Hossain Bhuiyan, chairman of the NBR.

He made the statements at a pre-budget meeting with the Economic Reporters Forum (ERF) on the NBR premises.

Mr Bhuiyan highlighted the need for a media campaign to discourage investors from buying shares of baseless companies.

“We’ve sat with Securities Exchange Commission chairman and Bangladesh Bank governor. The NBR got finance minister’s instruction regarding loan facility for affected investors,” he added.

About the definition of affected investors, the NBR chief said regulators will determine this.

He vowed to come out of tax exemption culture and offer time-bound tax exemptions on a case-to-case basis.

Mr Bhuiyan said new fiscal measures of the new VAT law will take effect on the date of the budget proposal.

He said the highest VAT rate would be 15 per cent in the new law with a provision of VAT rebate facility.

ERF president Saiful Islam Dilal, general secretary SM Rashidul Islam and other senior ERF members placed a charter of proposals on the next budget.

The proposals included capacity building of the taxman to check evasion, fortifying NBR research wing, ensuring clarity in tax exemption, focusing on direct taxation and strengthening taxpayer service centres.

In reply to ERF members’ query, Mr Bhuiyan said taxpayers’ information would not be supplied to the Anti-Corruption Commission wholesale except investigation purpose before filing a case.

The NBR will continue to provide information on specific cases or allegations that would be investigated by the commission, he added.

“At a meeting with law ministry, we’ve clarified our position regarding confidentiality of taxpayers’ information,” he went on to say.

The NBR chief said the provisions of the income tax ordinance would be duly followed to this end.

“In fact, the anti-graft body has no authority to seek information on a wholesale basis,” he added.

On corporate tax cuts, he said more than 60 per cent of the total income tax comes from corporate taxpayers. “So, it won’t be drastically cut in the budget.”

Unless the NBR finds out an alternative source of revenue to offset corporate tax cuts, it would proceed with this slowly, he added.

Mr Bhuiyan said corporate tax rate for listed companies is 25 per cent, but the rate seems high for a little number of listed companies.

The rate is 35 per cent for non-listed companies.

The NBR chief accused many companies of their unwillingness to be listed fearing proper account maintenance system.

On transfer pricing cell, he said it started paying off from this fiscal mobilising an additional Tk 1.0 billion in corporate tax from multinational companies.