‘Tax on turnover even after loss is contradictory’

The income tax provision that requires companies to pay 0.6 per cent tax on their gross receipt even after losses is contradictory to the spirit of income tax law, said Mostafa Kamal, chairman and managing director of Meghna Group of Industries (MGI).

The rule should be removed as it is detrimental to firms, he added in an interview with The Daily Star.

Responding to allegations of tax evasion by claiming losses by many companies, he said the tax authority can examine records if any company claims losses year after year.

They can investigate and if they find any anomalies, they can take action, Kamal added.

He also urged the tax administration to expand the tax net.

"Higher pressure is given on those who pay tax," Kamal said.

He then said the cost of businesses has increased and there is lack of availability of US dollar.

In addition, devaluation of taka has fuelled import costs and cumulatively led to spikes in customs duty, value added tax and other taxes.

"This is affecting us," Kamal said.

"And although commodity prices have declined in the international market, we cannot pass the benefit to consumers," he added.

The chief of one of the leading and diversified business houses also spoke about the export of non-traditional goods.

The government is providing incentives to boost exports of non-traditional goods and ultimately diversify the country's export basket.

However, Kamal informed that there are a lot of formalities to get the incentive.

"This should be made hassle-free. If anyone makes fake or inflated claims, policymakers can consider imposing heavy penalties," he said.

The MGI chairman went on to say there are discrepancies in the rule for incentives given to companies operating in or out of economic zones.

Companies that are making food items in economic zones are not given the 20 incentives for exports.

"This should not be the case," Kamal added.