The National Board of Revenue (NBR) Chairman, Md Abdur Rahman Khan, announced on Tuesday that the government plans to gradually reduce tax exemptions and may eventually eliminate them altogether.
Speaking at a pre-budget meeting at the NBR conference room, he stated, “We no longer want to bear the burden of tax expenditures. It is time to move away from the culture of tax exemptions.”
The meeting was attended by representatives from various professional bodies, including the Institute of Cost and Management Accountants of Bangladesh (ICMAB), the Institute of Chartered Accountants of Bangladesh (ICAB), the Institute of Chartered Secretaries of Bangladesh (ICSB), the Bangladesh Tax Lawyers’ Association (BTLA), the Bangladesh VAT Professional Forum, and the Retired Tax Officers Welfare Association.
The NBR chairman urged stakeholders to refrain from seeking tax exemptions, emphasizing that income tax is levied on profits and does not lead to bankruptcy. “Tax is only a portion of earnings. No one goes out of business by paying taxes,” he noted.
Criticizing the common practice of demanding tax exemptions before starting a business, he stressed that investment decisions should be based on economic feasibility, geographical advantages, and potential returns rather than tax relief.
“Industries should not depend on tax exemptions for viability. The primary concern should be whether the investment generates a reasonable return,” he added.
Addressing foreign-funded government projects, Khan highlighted the need for structural changes in agreements to ensure tax collection.
“If necessary changes are not made, we will continue to lose tax revenues. Contracts should clearly state that tax payments are the responsibility of the contractor,” he said, underscoring the importance of thorough vetting of agreements to prevent tax evasion.
He concluded by stressing the urgency of broader discussions on tax evasion in foreign-funded projects, as significant revenue is being lost in this sector.
