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Published : 17 Mar 2025, 04:27 PM
National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan has criticised life insurance company owners for treating depositor funds as their own, describing the situation as "terrible" and "dangerous”.
Speaking at the NBR's pre-budget discussion at the Rajasya Bhaban in Dhaka’s Agargaon on Monday, Abdur highlighted the sector's persistent governance issues, warning that many insurance executives lack the technical expertise required for responsible management.
"The biggest problem is that you do business without the necessary technical expertise, and there is no initiative to nurture it," he said.
Development partners have repeatedly urged Bangladesh to strengthen its insurance sector, but progress has been stymied by mismanagement, he added.
During the discussion, Bangladesh Insurance Association President Sayeed Ahmed presented a budget proposal on behalf of the organisation, identifying the industry as "neglected" and advocating for significant tax relief measures.
The association proposed reducing corporate taxes, abolishing tax deductions on health insurance, and removing value-added tax (VAT) on online-based insurance premiums.
Criticising the sector for failing to introduce health insurance cards akin to those in developed nations, Abdur emphasised the potential benefits of improved health insurance accessibility.
"If health insurance can be provided effectively, people in Bangladesh will readily embrace it," he said.
TAX EXEMPTIONS FAIL TO YIELD MARKET BENEFITS
Representatives from the Dhaka and Chattogram stock exchanges, the Association of Bankers Bangladesh Limited, the Dhaka Stock Exchange Brokers Association of Bangladesh, and the Merchant Bankers Association also presented their budget proposals, advocating for extensive tax exemptions in the capital markets.
Abdur, however, expressed scepticism about continuing tax holidays, arguing that prior exemptions have failed to yield tangible benefits.
"We have given tax exemptions all our lives, but the results are not there. Why is there talk of exemptions in advance? Why do we need a tax holiday in the first place?” he asked.
“I do not want to live in a culture of tax exemptions anymore. We are not able to get out of the low tax-GDP ratio due to all the exemptions. We have become infamous for giving exemptions that equal the revenue we collect."
He noted that investors in Bangladesh’s capital markets over the past 15 to 20 years have suffered losses ranging from 7 to 15 percent of their capital.
"The benefits of tax incentives have not materialised. We are moving away from an exemption culture and have declared war on it,” said Abdur.
STOCK EXCHANGES, BANKERS SEEK FURTHER CONCESSIONS
Dhaka Stock Exchange PLC called for complete tax exemptions on capital gains made by individuals trading securities, along with reductions in tax rates on dividend income and listed bonds.
Similarly, the Chittagong Stock Exchange proposed withdrawing double taxation on dividends, making dividend income tax-free, and increasing the tax difference between listed and unlisted companies to 10 percent.
The DSE Brokers Association of Bangladesh suggested lowering the capital gains tax rate from 15 percent to a maximum of 10 percent.
The Association of Bankers Bangladesh Limited (ABB) called for the withdrawal of excise duties on savings accounts and credit cards, implementation of VAT software, and specifying time for completion of VAT audit activities.
The Merchant Bankers Association, meanwhile, recommended reducing corporate tax rates for merchant banks to 25 percent, abolishing taxes on stock dividends, and cutting VAT for listed companies to 10 percent.
