Speakers at a discussion emphasised increasing direct income tax to reduce increasing inequality in taxation system. They came up with the remarks in seminar titled 'Combating Inequality and Direct Application to Increase Revenue Income'  organized jointly by Policy Integration for Development (RAPID) and Economic Reporters’ Forum (ERF) at ERF auditorium on Saturday. If all the taxable persons pay tax according to the income tax slab, it will be possible to achieve 3.1 percent by increasing the current 1 percent personal income tax as a proportion of GDP, they added. Read more: Digital infrastructure key to attracting more remittance through legal channels, speakers say For this, the number of registered taxpayers should be increased. At the same time, if tax exemptions are removed, it is possible to increase taxes by 2 percent of GDP, they opined. Rapid chairman Dr.  Mohammad Abdur Razzaque presented a keynote paper on the topic. He said Bangladesh's tax-GDP ratio is 9 percent, which is the lowest in the world. The main reason for this is that there are very few direct tax. It should increase. Currently indirect tax  65 percent indirect and direct tax 35 percent. However, the initiative taken by the government to bring direct tax to 70 percent and indirect tax to 30 percent in the coming days is the right decision, Razzaq said. He said the two problems in Bangladesh are growing inequality and low government spending as a share of GDP. The main reason for this is the lack of direct tax. Although the number of direct tax has increased more than before. However, in terms of GDP ratio and quantity, it is much lower in almost all countries of the world, including India, Bhutan, Malaysia, the government's income is more than that of Bangladesh. Although the poor people of the country pay the highest VAT in proportion to their income. And people with higher income pay the least VAT. Read more: ERF honoured with WCO Certificate of Merit 2022 He suggested to introduce social insurance system, by which evry person income will be counted and it will be easy collection tax. Former NBR chairman Dr Nasir Uddin Ahmed, additional secretary of finance ministry Kabirul Ezdani Khan, professor development studies of DU and Executive Director, RAPID Dr. Abu Eusuf, among others, spoke in the seminar.  

Bangladesh Chamber of Commerce (BCI) has demanded simplification of the taxation system saying that people feel reluctant to pay taxes due to complexities. “The taxation system must be simple and taxpayers-friendly so that people feel encouraged”, said BCI president Anwar-ul-Alam Chowdhury (Parvez) while addressing a press at the BCI Conference room in the city to place budget reactions. President of the Metropolitan Chamber of Commerce and Industry (MCCI) president Md Saiful Islam and senior vice president of the BCI Priti Chakraborty and director Delower Hossain Raja were present on the occasion. Also read: Taxation of Bangladeshi Freelancers in 2021 Parvez said that in the current system, experienced people do not encourage others to pay tax due to the complexity of the system. “If the government can create a friendly atmosphere, the number of taxpayers could reach 1.5 crore within a year and the budget deficit could be met from the revenue collections”, he said. The BCI presented a number of demands and recommendations for incorporating in the national budget. The demands include a 5-year tax holiday for young entrepreneurs, and then fixation of corporate tax for micro, cottage and small industries at 10-15 percent, fixing the source tax at 0-3 percent for import of raw materials, 2 percent tax waiver for all green industries, fixing VAT at 10 percent for import-substitute industries and tax-free income limit at Tk 500,000 for individual taxpayers. Parvez also urged the government not to raise electricity and petroleum prices saying that if the cost of production goes up, it will impact on the production and finally production would decrease. He observed that young entrepreneurs would not be benefited from the special fund formed by the government due to lack of specific policy guidelines in the national budget 2022-23. “We urge the government to frame a policy guideline so that the young entrepreneurs can utilize the fund,” he said. Also read: Focus on extending tax net to enhance Tax-GDP ratio: ICAB Parvez urged the government to rethink about a decision not to allow operation of business establishments including markets and shops after 8 pm. He said the businessmen could not do their business in last two years during the Eid. “So this year Eid is very important to them to do their business ,” he said.