A leading trade body yesterday urged the government to reduce the corporate tax rate.

The existing tax rate that hovers between 25 percent and 45 percent should be cut by 10 percentage points in phases over the next five years, Foreign Investors' Chamber of Commerce and Industry (Ficci) said.

The government should adopt a holistic approach while framing budgetary measures in spite of giving preference to any industry, Ficci President Rupali Chowdhury said.

She spoke while placing budget proposals for 2017-18 at the National Board of Revenue. The chamber also called for framing policy for at least three to five years, so that businesses can make better tax and investment plans.

Businesses will get confidence if the law is not changed every year, Chowdhury said.

She said frequent changes in tax and revenue policies create difficulty for businesses to do future plan.

“There is a slowdown in the economy. There is a lack of consumption in all industry across.”

The slowdown has not only affected the construction industry, but also the food, beverage and FMCG (fast moving consumer goods), she said. “So we have to work very hard.”

“This reduction of tax will also attract more investment, and thereby more employment will be created. It is also worthwhile to mention that the corporate tax rate in many developing countries is much lower than Bangladesh.”

The trade body also suggested increasing the tax-free income limit to Tk 4 lakh for the next fiscal year from the existing 2.5 lakh, by taking inflation into consideration.

The present tax-free threshold is very low and it needs to be increased to sustain and improve disposable income, it said.

Representatives from the chambers said house rents and conveyance have gone up tremendously in metropolitan areas in recent years.

So they also demanded increasing the tax rebate against investment and hiking the tax exemption limit in house rent and conveyance.

“It will be good if we get specific direction about the VAT law,” Chowdhury said.

She also urged the revenue collector to expand the tax net. “Those who give tax are continuously paying while others remain out of the net.”

At the programme, Bangladesh Women Chamber of Commerce and Industry (BWCCI), led by its President Selima Ahmad, stressed the need for formulating women entrepreneur-friendly budget.

BWCCI called for continuation of the allocation of Tk 100 crore in the next budget to facilitate women entrepreneurship and set Tk 4 lakh as tax-free income limit for women.

The trade body also demanded a separate pavilion at Dhaka International Trade fair so that women entrepreneurs can sell their goods.

It said entities run by women entrepreneurs should get VAT and tax waiver for up to Tk 50 lakh in annual turnover.

There should be a women entrepreneur quota in the process for selection of Commercially Important Persons, the chamber said.

The BWCCI wanted low-cost loans for women, including for those who run cottage industries in rural and suburbs.

It also urged the government for framing policy for establishment of separate market or quota, inclusion of women entrepreneurs in developing tourism spots.

The chamber also suggested allocating plots to the women entrepreneurs on quota basis in the economic zones.