AN increasing number of trade organizations have been demanding a reduction in corporate tax rates in the upcoming 2017-18 National Budget. Foreign Investors' Chamber of Commerce and Industry has asked for cutting corporate tax by 10 percentage points, which is now hovering between 25 percent and 45 percent. To attract Foreign Direct Invest (FDI), which has decreased, and increase domestic investment in large manufacturing sectors, the government should reduce the corporate tax as the tax rate is higher than many developing countries. While large amounts of investment is unlikely due to bottlenecks and weak aggregate demand, the burdensome corporate tax pushes even the local investors to look for investment in another country by laundering money and the foreign investors to look for alternate markets. If the tax is reduced it will attract more investment, and thereby more employment will be generated, resulting in the speed up of the wheel of economic progress.
The trade body in a meeting with the National Board of Revenue (NBR) has called for comprehensive policies. Business people will get confidence if the laws and policies would not change every year as the frequent change in tax and revenue policies create difficulties for businesses to do future planning. The economic growth rate in the country is hovering around 6 percent in the last few years but the tragedy is the growth has not created significant levels of employment. So, the increasing numbers of youths who enter the job market remain unemployed and the expected growth in jobs doesn't occur.
Meanwhile, Bangladesh Women Chamber of Commerce and Industry (BWCCI) stressed the need for formulating a women entrepreneur-friendly budget. The chamber called for the continuation of the allocation of Tk 100 crore in the next budget to facilitate women entrepreneurship and set Tk 4 lakh as tax-free income limit for women. It said entities run by women entrepreneurs should get VAT and tax waiver for up to Tk 50 lakh in annual turnover. They asked for low-cost loans for women, including for those who run cottage industries in rural and suburbs.
The upcoming budget should be a budget that can successfully create employment opportunities by encouraging investors to set up labour-intensive large manufacturing industries. Without a turn into manufacturing, the economic growth would not be sustainable beyond what the World Bank has projected. The corporations should be given incentives by lowering the corporate tax while female entrepreneurs need more facilities in the budget.