National Board of Revenue (NBR) Chairman Md. Abdur Rahman Khan said the government would gradually reduce tax exemptions and also hinted that it may eventually move away from such culture. "We don't want to incur further tax expenditures. It is time to move away from the culture of tax exemptions," he said while speaking at a pre-budget meeting at the NBR conference room in the capital on Tuesday (Mar 11), local media reported.
Representatives from the Institute of Cost and Management Accountants of Bangladesh (ICMAB), Institute of Chartered Accountants of Bangladesh (ICAB), Institute of Chartered Secretaries of Bangladesh (ICSB), Bangladesh Tax Lawyers' Association (BTLA), Bangladesh VAT Professional Forum, and the Retired Tax Officers Welfare Association attended the meeting.
Mr. Rahman also urged all stakeholders to refrain from advocating for tax exemptions. "Income tax is applicable when there is a profit. No one goes bankrupt by paying income tax, as it is just a portion of their earnings," he said.
Criticizing the mindset of seeking tax exemptions before starting a business, the revenue board chief emphasized that investment decisions should be based on economic viability, geographical advantages, and potential returns rather than tax relief. "There is no reason to fear income tax. The perception that industries should only be established if tax exemptions are granted is incorrect. The key factor should be whether the investment yields reasonable returns," he added.
Regarding foreign-funded government projects, Abdur Rahman Khan said structural changes in agreements are necessary to ensure tax collection.
"If changes are not made, we'll continue missing out on tax revenues," he said, adding that contracts should explicitly mention that tax payments are the responsibility of the contractors.
He stressed the need for careful vetting of agreements to prevent tax evasion adding that tax evasion is happening in this sector while a broad discussion is needed to address the issue.
