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Suggestion for reform of tax, tariff and incentive system

Suggestion for reform of tax, tariff and incentive system
Suggestion for reform of tax, tariff and incentive system

According to the circular, Bangladesh will lose duty-free and quota-free benefits as a least-developed country in terms of exports and the existing opportunities in the field of exports will decrease after the transition from a LDC to a developing country. For this reason, Free Trade Agreement (FTA) or Preferential Trade Agreement (PTA) should be executed with various countries to increase exports.

However, there is a risk of reduced revenue from entering into such trade agreements. At the same time, it has been suggested that existing cash incentives and subsidies on exports, which are inconsistent with World Trade Organization (WTO) regulations, should be phased out and alternative ways of promoting exports should be devised instead.

Three conveners of the three study groups formed under the sub-committee at the workshop presented key recommendations. NBR Member (Tax Policy) Sams Uddin Ahmed presented on tax related rules and procedures reform, NBR Member (Tax Policy) presented on tariff rationalization. Masood Sadiq and Director General (Additional Secretary) Arfin Ara Begum, Monitoring Cell, Finance Department made a presentation on export incentives.

The study group’s presentation on ‘Reforms in Tax Laws and Procedures’ at the workshop focused on identifying unnecessary areas of tax evasion by conducting research on tax expenditure. Special emphasis is also placed on increasing the scope of automation and digitization in revenue administration.

It is also recommended to align the relevant revenue collection laws (such as the new Customs Act and the new Income Tax Act) with international best practices. Apart from this, it is recommended to modernize procedures to simplify the customs process and speed up the clearance of goods as per the Trade Facilitation Agreement of the World Trade Organization.

Notable among the study group’s recommendations on ‘tariff rationalisation’ is bringing the customs duties on products in excess of the WTO bond duty rate range within the tariff rate range.

The minimum import price system is not in line with WTO’s Agreement on Customs Valuation, hence its phase-out and gradual reduction of ‘para-tariff’ and supplementary duties applicable at the import level.

The article is in Bengali

Tags: Suggestion reform tax tariff incentive system

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