Businesses are likely to see cuts in corporate tax rate in the upcoming fiscal year, said Finance Minister AMA Muhith yesterday.

“My proposal will be to rationalise the rate,” he said at a consultative meeting of the National Board of Revenue at the Bangabandhu International Conference Centre in Dhaka.

The NBR and the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) jointly organised the meeting to discuss the business community's proposals for the national budget for 2017-18.

Muhith made the comments after FBCCI President Abdul Matlub Ahmad demanded a reduction in corporate tax rate to 22.5 percent from existing 25 percent for listed companies and 30 percent for manufacturing firms from 35 percent now.

For banks, financial institutions and insurance companies the apex trade body demanded 2.5 percentage points cut in the tax rate. It stands at 40 percent now.

Muhith said he would share his 'rationalisation plan' with the high-ups of the government.

He also shared his plan for revising the highest rate of corporate tax of 45 percent, which is applicable for mobile phone operators.

“If we can announce tax rates for 3 to 5 years it will be good,” the minister said but added that it would not be possible at the end of the tenure of the government.  Muhith said he would outline his thoughts on the matter in his budget proposal.

On personal income tax, Muhith talked about fixing a tax-free income limit so that the ceiling remains in place for certain years. He cited the example of the US where tax-free income limit stays unchanged for a long period.

“I will place a proposal on the issue this year,” he said.

At the meeting, businesspeople demanded protection of local industries should the supplementary duties as envisaged in the new VAT law are implemented.

Muhith said, “We have already started the process to find out ways to protect local industries.”

He said the new VAT law might be amended to give protection to local industries.

At the meeting, the FBCCI called for introduction of multiple VAT rates, an increase in VAT-free annual turnover to Tk 36 lakh, and imposition of 3 percent turnover tax on annual income of up to Tk 1.5 lakh.

It also demanded 2 percent tax for traders, particularly shop-owners irrespective of their annual turnover.

The federation demanded a hike of tax-free income limit to Tk 3.25 lakh for individuals, revision in the slabs of income and corresponding tax rates citing erosion of purchasing power because of inflation and rising living cost.

It called upon to the government to raise the surcharge-free limit of net wealth to Tk 5 crore from Tk 2.25 crore now.