Muhith admits corporate tax is ‘high’ in Bangladesh, hints at cutting rates

Finance Minister AMA Muhith has hinted at cutting corporate tax rates, admitting that the rates are much higher in Bangladesh than they are in other countries.

“I am going to reduce, or perhaps rationalise, the corporate tax rates,” he told editors at a pre-budget discussion at the state guesthouse Padma on Monday. “It’s one of the highest in the world.”

As the businesses pushed for a cut in corporate tax before the budget for current 2017-18 fiscal year, Muhith had said in the budget proposal there was little merit to claims that the corporate tax rate is ‘very high’ in Bangladesh.

In the meeting with editors before the 2018-19 budget, the finance minister clearly expressed a different view.  

In Bangladesh, businesses pay corporate tax at different rates.

Muhith said his intention was to eliminate ‘so many layers’. “It will be ideal if we can make two ranges.”

He referred to the range between 45 percent and 27 percent, and said changes were essential.

But, he doubted whether he would be able to do it. “I’m not sure. When I discussed it in the mini-cabinet, it received objections.”    

The finance minister told the editors he would continue working on the issue.

A couple of editors put more emphasis on automation to stop tax evasion. “Even if the government distributes POS machines free of cost, the state coffers will be flooded with money,” said Mozammel Babu of Ekattor TV.            

“Discourage cash transactions at all levels,” added bdnews24.com Editor-in-Chief Toufique Imrose Khalidi.

Dewan Hanif Mahmud of Bonik Barta said money paid to companies such as Facebook and Google were mostly illegal transaction.

“Bring them under your regulatory control. Ask them to incorporate (subsidiaries) in Bangladesh,” added Khalidi.

To find out how much money is being paid illegally, he said, “All you have to do is write to the biggest (advertisement) spenders asking about the figures and how they were paying these companies.”

“And write another letter to the recipient companies (Google and Facebook) asking how they are getting paid (by the Bangladeshi companies).”

Both Babu and Hanif reminded the minister of how the payments to foreign TV channels were regulated.

The minister agreed with suggestion that landing fee be imposed on foreign TV channels.

“I am going to do that. Objections come from the information ministry. But I am going to overrule that this time.”