NBR tells banks to cut lending rates or lose corporate tax benefits

Banks can forget about getting corporate tax benefits proposed in the new budget if they do not lower interest rates on loans for businesses, the chief of tax administrator has said.

“Banks are fortunate because the corporate tax has been reduced. But if the lending rate is not right, they will not get the tax benefits," Md Mosharraf Hossain Bhuiyan said at a news conference of the Metropolitan Chamber of Commerce and Industry or MCCI on Thursday. 

The National Board of Revenue chairman, however, did not make it clear how the government would adjust the corporate tax and lending rates of the banks if they did not cut the lending rates.

He noted that the owners’ organisation Bangladesh Association of Banks announced capping lending rates at 9 percent on Wednesday.

The MCCI organised the media conference to react to the Tk 4.64 trillion budget proposed by Finance Minister AMA Muhith for 2018-19 fiscal year.    

In the budget, Muhith proposed to lower corporate tax for banks, insurance firms and financial institutions listed on the capital market to 37.5 percent from 40 percent. The proposed cut for non-listed banks, insurance firms and financial institutions is to 40 percent from 42.5 percent.

Different quarters have criticised Muhith for proposing the cuts in corporate rates for banks before ‘resolving the issues besetting the sector’.