The Institute of Chartered Accountants of Bangladesh (ICAB) has said that the target set by the government for borrowing from domestic sources in the proposed budget for the fiscal year 2024-25 may cause inflation.
ICAB President Mohammad Forkan Uddin gave this opinion in a press conference on Saturday (June 8) to highlight the views of chartered accountants on the proposed national budget.
He said, in terms of macroeconomics, the country’s inflation rate is more than 9 percent, which is indicative of high inflation. About 20 percent of the total budget i.e. Tk 1,60,900 crore is proposed to be financed through borrowing from domestic sources, which may lead to inflation.
Forkan Uddin said that the Finance Minister has presented a timely and comprehensive budget of Tk 7 lakh 97 thousand crores for the financial year 2024-25 in Parliament. The proposed budget is 14.2 percent of our GDP. Despite the Russia-Ukraine war, high inflation, rising commodity prices, global crisis, dollar crisis, slowdown in business-investment and employment and other global uncertainties, the government has taken up the challenge of implementing the development budget of Tk 2.65 trillion. Which will play a helpful role in our journey to a developed country.
He said that expansion of tax net to increase the tax-GDP ratio is the need of the hour. We believe that the joint initiative of NBR and ICAB in implementing the Document Verification System (DVS) is contributing significantly to the desired revenue generation and will contribute more in the days to come.
He further said that we thank the Ministry of Finance and the National Board of Revenue (NBR) for their support to ICAB in implementing DVS to increase tax revenue.
The ICAB President said, We thank the Finance Minister for highlighting the contribution of DVS in increasing revenue collection in the budget speech and for enhancing the authenticity and transparency of income displayed by taxpayers.
Like the previous years, this year also ICAB has advised the National Board of Revenue on revenue laws related to the 2024-25 budget such as Income Tax Act 2023 and Income Tax Rules 2023, Value Added Tax and Supplementary Duties Act 2012 and Value Added Tax and Supplementary Duties Rules 2016, Customs Act and other laws and rules. He said that he has sent the above proposal.
Appreciating the government for taking several practical initiatives in the proposed budget, he welcomed some of the recommendations in the Income Tax Act. These include-
1. Introduction of tax rates applicable for two years
2. Reduction in tax rates for private companies and one person companies (OPC).
3. Reduction of withholding tax on essential commodities
4. Provision of obligation of audited financial statements for all taxpayers other than natural persons, educational institutions engaged in imparting primary and pre-primary education and any firm, trust, private association, foundation, society, and co-operative society having gross receipts below Rs.5 crores.
At this time, he recommended to consider some issues. These include-
1. Bringing those professional and vocational educational institutions under the same tax structure under the Seventh Schedule as public universities, which are autonomous institutions established by order of the President or by an Act of Parliament and governed by a Board of Directors constituted under the rules of the same Act, engaged in education and human resource development.
2. Selection of tax-VAT audit documents based on predetermined percentage rates, criteria and random selection without human intervention and simplifying the audit process.
Changes in VAT and Supplementary Duties Act are appreciated by ICAB. These include-
1. To pay 10 per cent instead of 20 per cent of the demand without penalty, while filing an appeal before the Appellate Tribunal and Appellate Commissionerate.
2. Incorporation of companies with turnover above Rs.10 crore as VDS authorities will increase VAT collection.
3. Initiative to set up EFDMS for expansion of VAT net.
ICAB also welcomed the formulation of the new Customs Act 2023 in Bengal and its implementation from June 6, 2024. Along with that, it appreciated some aspects of customs law. These include –
1. The new Customs Act introduces the provision of self-assessment under Section 90 (3).
2. Initial duty or tax has been reduced from 50 percent to 10 percent in case of appeal against claimed duty and tax or penalty.
3. The time limit for claiming refund has been extended from 6 months to 3 years.
4. Providing facilities for customs and clearance of goods by declaration in prescribed form and manner in lieu of bill of entry or bill of export.
5. Provision for replacement, amendment and withdrawal of product declaration.
ICAB’s former president and council member also attended the press conference. Humayun Kabir, vice president ABM Lutful Hadi, former president and council member. Moniruzzaman, ICAB Chief Executive Officer (CEO) Snehashish Barua and others.
MAS/ZH/ASM
