National Board of Revenue chairman Abdur Rahman Khan said that many taxpayers abuse the exemption as the tax exemption practice always misuse loopholes in the taxation system.
He was speaking at the pre-budget discussion with businesses for the upcoming national budget for the financial year 2025-26 at the NBR office in the capital, Dhaka, on Thursday.
He said that after more than 50 years of independence, it is unrealistic to demand tax exemptions and urged businesses to refrain from demanding any special treatment.
He said that compliant taxpayers endure sufferings while paying taxes, but the people who are out of the income tax net lead peaceful life.
Expanding the tax net would significantly lower the pressure on compliant taxpayers, he said.
鈥楴ow it is high time to implement an indiscriminatory tax net and gradually phasing out from the exemption practices,鈥� he added.
He also urged businesses to become compliant taxpayers and said that governance is the main problem in collecting taxes, and they are working on it.
He said that businesses are facing issues due to multiple VAT slabs, such as 5 per cent, 7.5 per cent, 10 per cent, or 15 per cent.
鈥業f the businesses were agreed and they could submit the accurate information, the government could introduce a single VAT rate which could be beneficial for all,鈥� he added.
He also said that NBR still urged businesses to agree to introduce a single VAT rate anytime, even by reducing the VAT rate in some cases.
He also said that VAT is not the taxes of businesses; they collect it from consumers and then submit it to the state coffers.
鈥榃e have to make a discipline in the VAT sector as there is no opportunity to be solely dependent on custom duty. Moreover, the custom duties must be curtailed drastically after the graduation from the LDC,鈥� he added.
During the discussion, Anwar Ul Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries, proposed increasing the tax-free income to Tk聽5 lakh in the FY26 budget.
He also proposed reducing the corporate tax to 25 per cent for private limited company and 20 per cent for public limited company from existing 27.5 per cent and 22.5 per cent respectively.
The BCI also demanded reform of section 55 of the Bangladesh Income Tax Act 2023. However, the NBR said that they would consider it in the next budget.
Anwar Ul Alam Parvez also urged reducing the tax at source to 0.5 per cent from the existing 1 per cent in the upcoming budget.
A number of district chambers also presented their proposals for the upcoming budget.
Natrsingdi Chamber of Commerce and Industry proposed reducing VAT on wholesale clothing turnover to 0.5 per cent from the existing 1.5 per cent.
They also asked to exempt advance tax on importing manufacturing equipment and others from existing 3 per cent and 5 per cent respectively.
Bangladesh Papers Mills Association also presented a set of proposals to the NBR for the upcoming budget of FY26.