Muhith asks secys to include taxes in dev project cost estimation

Finance minister Abul Maal Abdul Muhith on Tuesday asked the secretaries of the ministries and divisions for estimating the cost of development projects calculating applicable taxes as the government decided not to allow any tax exemption to any organisation from the next fiscal year.
The decision came at a meeting on preparing a tax exemption policy held on the day at National Economic Council auditorium at planning ministry in Dhaka.
All secretaries of the government and high officials of the National Board of Revenue attended the meeting presided over by the finance minister.
Muhith informed the secretaries that the government decided to adopt a ‘no tax exemption’ policy from the next fiscal year of 2016-17 in a bid to improve tax-GDP ratio through increasing domestic resources and come out from the existing widespread exemption culture, officials attended the meeting told New Age.
No private or public sectors, except some exception, will get tax exemption in future, they said.
The revenue board is now formulating the policy in this regard.
After the meeting, NBR chairman Md Nojibur Rahman said that finance minister instructed the secretaries to follow ‘no exemption’ policy to facilitate raising the existing tax-GDP ratio and get rid of exemption culture.
He, however, said that tax benefits for projects under public-private partnership would be continued.
Regarding government’s plan to acquire shares in the PPP and other joint venture projects equivalent to the amounts of tax exemption granted to those projects, he said that they were considering some options including this one.
The issue, however, would require further discussion, he added.
Officials said that the government would pay the applicable taxes from its own fund even for PPP or other joint venture projects.
According to the draft policy, government agencies will not get waiver from paying taxes—value-added tax and customs duty—in purchasing or collecting any goods and services required at any stage of project implementation, maintenance and operation.
Instead, project implementing agencies will estimate the total cost of projects including taxes and finance ministry will provide adequate allocation for projects, the draft policy stated. Taxes will be paid from the allocation, it said.
Goods to be imported under diplomatic rules and regulations and goods to be imported under grants for projects and activities related to public welfare will get tax waiver, it added.
At the meeting, a secretary, however, requested the finance minister for fixing a uniform rate of taxes for development projects and making the payment procedure easier to help the agencies to avoid complexities in paying taxes, officials said.
Secretaries also requested the tax authority to consider the reality including the necessity of project revision, increase in project cost due to price of materials in project implementation process during formulating the policy.
Currently, the NBR has been exempting or reducing taxes for different taxpayers and projects in line with the government’s instructions and hectic lobbying by the taxpayers.

News Courtesy: www.newagebd.net