Good Governance | Resource Mobilization | …...Akhtar Sohel Kasem FCA A F Nesaruddin FCA Nasir...

GOOD GOVERNANCERESOURCE MOBILIZATION

CHALLENGES AHEAD

April - June 2018

Good G

overnance | Resource Mobilization | C

hallenges Ahead

April - June 2018

1APRIL - JUNE 2018 | The Bangladesh Accountant

ISSN 1993-3649

EDITORIAL BOARD CONTACT US

ChairmanDr. Jamshed S A Choudhury FCA

Co-ChairmanHarun Mahmud FCA

MembersAkhtar Sohel Kasem FCAA F Nesaruddin FCANasir Uddin Ahmed FCAMd. Shahadat Hossain FCAGopal Chandra Ghosh FCAModdassar Ahmed Siddique FCAAmanullah Khan FCAM Idris Ali FCAMasih Malik Chowdhury FCADr. Md. Abu Sayed Khan FCAMd Abdus Salam FCAMohammad Zahid Hossain FCAS. M. Rafiqul Islam FCADr. ASM Hossain Tayiab FCAMohammad Redwanur Rahman FCAMuhammad Aminul Hoque FCAMd. Zahidul Islam Khan FCASk. Md. Tarikul Islam ACADhali Tanvir Ahmad Siddiqui FCAAnika Sultana FCABidhan Chandra Mandal ACAMd Anwar Hossain ACAIsmat Jahan ACAAfratul Kawsar ACAMustaq Ahmed ACASazib Kumar Saha ACAMd. Faruk Hossain ACAZoinul Abedin Sakil ACAKhosnur Jahan ACAMd. Abdul Wahab Akanda ACAAtaur Rahman ACAFarhad Hussain ACAMd. Muktadir Hossain ACAMomena Hossain Rupa ACAChairman DRC-ICAB

Member SecretaryMohammed Emdadul Haque FCATechnical Adviser, ICAB

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2 APRIL - JUNE 2018 | The Bangladesh Accountant

ICAB PUBLICATIONS

ContentsApril - June 2018

P7

for more details, please visit

www.icab.org.bd

P7 Desirable Tax Reforms for an E�ective Taxation System Akhter Zamil FCA

P14 Substitute Progress Scenarios for Bangladesh to Reaching the Middle-Income Country Status Md. Atiqur Rahaman ACA

P24 Bangladesh National Budget 2018-19: Bangladesh on a Pathway to Prosperity Mohammed Tofazzul Hussain FCA

P29 The Benefit of Imposing Taxes on Ridesharing S M Ashfaqur Rahman ACA

P36 SMEs in Bangladesh and National Budget 2018-19 Mohammad Zahid Hossain FCA

P40 Impact of National Budget 2018-19 on the Macro Economy of Bangladesh Md. Shahadat Hossain FCA

P44 Bank Audit Fees and ICAB Fee Structure - A Comparative Study Masih Malik Chowdhury FCA

P4 Editorial

P5 President’s Desk

ICAB publications include, inter alia, a quarterly journal titled 'The Bangladesh Accountant' and a monthly mouthpiece 'ICAB News Bulletin'. In the quarterly journal articles of ICAB Members, Members from other Accountancy bodies, Academics and Business Leaders from home and abroad are published. These articles cover a wide area of our profession, i.e, Auditing, Accounting, Financial and Economic. The monthly news bulletin publishes latest ICAB events mostly of the month it is published. This bulletin also acts as an information hub for the Members to keep up to date what is happening in and around ICAB. In addition to these two regular publications, ICAB also publishes books, monographs, booklets and Students’ Study Manuals regularly.



P48 IFRS-Local GAAP Reconciliation Statements Insights from the Academic Literature Dr Muhammad Shahin Miah CPA

P56 Human Capital of Bangladesh Needs A Proper Planning M. Idris Ali FCA

P61 Bangladesh Economy: An Outlook through Balance of Payment Md. Nazib Ullah ACA

P65 Conservative Interest Rate on Deposit Thauhidul Alam

P73 Creative Accounting Practices in Corporate Financial Reporting of Bangladesh: Ethical and Regulatory Perspectives 1 Md. Salah Uddin 2 Ismat Jahan ACA

P85 Forecasting 4G Users in Bangladesh: A Multidisciplinary Perspective 1 MD. NUR-AL-AHAD 2 MD. ADNAN RAHMAN 3 DR. ABU BAKAR A. HAMID

P93 E-commerce in Bangladesh: An Overview Shib Sankar Dey ACA

P98 ICAB-Prothom Alo Pre-Budget Parley The National Budget 2018-19: Aims to Reach Upper Middle Income Country Through Achieving Sustainable Development Goals (SDGs) Abu Taher

News & Events

News Bulletin

Journal

Circular & Notice

Digital Highlightswww.icab.org.bd

In the sequence and act of pre-budget parley, in this time The Bangladesh Accountant’s issue (April-June) has given top priority on the recurrent national budget. The articles published in this issue delineated the country’s economic scenario under the purview of National budget 2018-2019. Although many of them were received before the announcement of national budget, but surely these are resourceful ones and readers would find a panoramic view of micro and macro-economic situation of the country.

In June the budget was passed by the Parliament. This year, at present and before the time of placing the Budget in the Parliament, e�orts of all sections of businesses have remained mainly concentrated on discussions regarding the size of the budget, income and expenditure management, Annual Development Programmes (ADP), foreign trade, foreign direct investment (FDI),

revenue target, transparency and accountability, etc.

In budget 2018-2019 the increased revenue target is Tk 296,201 crore. However, it is apprehended that achievement of this will be a di�cult task, if not impossible. Without capacity building of NBR to infuse dynamism & e�ciency needed, di�erent trade and professional bodies are skeptical about accomplishment of this revenue target.

The total size of the budget at Tk. 4 684 573 crore was announced, setting the goal of GDP growth at 7.8% and defining a set of plans for a prosperous, happy and peaceful Bangladesh. We hope the way onward, the country will get permanent status of ‘developing country’ through making remarkable progress in fighting multifaceted problems; population problems, violence against woman and children, poverty, corruption, crime, dowry system, illiteracy, unemployment, the latest influx of Rohingyas, etc.

With the national election fast approaching, we may take this as an election budget. However, we hope this budget could provide much enthusiasm needed among the broader sections of the people in terms of meeting some of their desires.

Last but not the least we, the Editorial Board highly encourage the readers to give feedback regarding the contents of the journal. Your suggestions are more valuable to the Board while we are giving relentless e�orts to make the publication, a precious one.

Kindest regards,


“The total size of the budget at Tk. 4,684,573 crore was announced, setting the goal of GDP growth at 7.8% and defining a set of plans for a prosperous, happy and peaceful Bangladesh.”

Editorial

Dr. Jamshed SanyiathAhmed Choudhury FCAChairman – Editorial BoardCouncil Member - ICAB



President’s Desk“As trade and commerce of the country increases, ICAB has a major role to play. Rightly so the institute is pro-active in creating awareness, generating ideas and thoughts, promoting transparency and accountability not only in its own area but also in overall economic affairs of the country through this journal.”

This is the second issue of The Bangladesh Accountant in my tenure and I thank the Editorial Board who are working relentlessly to bring out the publication timely. This April-June issue of the journal is coming out when discussions on National Budget and the economy of Bangladesh are getting paramount importance in a juncture the country is moving toward MIC (middle income country). This issue projects a clear picture on country's fiscal activities and steps in ensuring corporate good governance.

As trade and commerce of the country increases, ICAB has a major role to play. Rightly so the institute is pro-active in creating awareness, generating ideas and thoughts, promoting transparency and accountability not only in its own

area but also in overall economic a�airs of the country through this journal. Bangladesh achieved the status of middle income country and has been maintaining 7% GDP growth in last few years to keep this development trend.

Bangladesh should be undoubtedly proud of its development achievements and progress accelerated over the past decade. It has crossed the WB defined lower middle-income country threshold in 2015 and now aspires to achieve upper-middle income country status by 2031 and higher-income country status by 2041. These are certainly ambitious targets and achieving these targets will require major improvements in policies, institutions and resources.

Rightly the government has put up Dewan Nurul Islam FCAPresident-ICAB

The county needs to raise the investment GDP ratio to 29%, if it wants to attain the projected 7.8% GDP growth. Attracting fresh investment from home and abroad is crucial to achieve the GDP growth. However, the domestic investments are struggling with insu�cient infrastructure support and prevailing high interest rates. Foreign direct investment situation is really discouraging, net FDI in the country declined by 8.42% to USD 2.13 billion in 2017 from USD 2.33 billion in 2016. It was further dropped by 4.20% in the first 10 months of the current fiscal year, according to latest statistics released by Bangladesh Bank.

an ambitious revenue target on the income side to sustain the expanding public expending programmes. Attaining the increased revenue target for this fiscal year will continue to be a major challenge, despite a rise in the number of tax payers. The National Board of Revenue has targeted Taka 2.96 trillion in tax revenue, which is 31.64% higher than the revised one of Taka 2.25 trillion of the outgoing fiscal. In order to meet the target, the authorities should find out new avenues of tax collection instead of imposing double tax and the tax burden on the compliant enterprises.


Net FDI in the countrydeclined by

8.42%to USD 2.13 billion in 2017from USD 2.33 billionin 2016.

A country’s tax regime is a key policy instrument that may positively or negatively influence investment climate. Any investment, whether domestic or foreign, flows into an economy for gainful return. Incentives alone will not attract FDI, if not conducive atmosphere prevails.

The government will face quite a few challenges to meet the target set and emphasis should be given on attracting the private sector investment, increasing capacity of the National Board of Revenue and identifying areas for expanding tax net to achieve the target.

Dear fellow members, usually April-June issue of this journal becomes a platform to exchange views and opinions regarding national budget and you would highly be benefitted from this discussion. Thank you all for your continuing supports to the Editorial Board for performing its vested responsibilities.

Again I thank the Board and its team for their rightful initiatives to make this issue, a resourceful one.

The county needs to raise the investment GDP ratio to 29%, if it wants to attain the projected 7.8% GDP growth. Attracting fresh investment from home and abroad is crucial to achieve the GDP growth. However, the domestic investments are struggling with insu�cient infrastructure support and prevailing high interest rates. Foreign direct investment situation is really discouraging, net FDI in the country declined by 8.42% to USD 2.13 billion in 2017 from USD 2.33 billion in 2016. It was further dropped by 4.20% in the first 10 months of the current fiscal year, according to latest statistics released by Bangladesh Bank.

an ambitious revenue target on the income side to sustain the expanding public expending programmes. Attaining the increased revenue target for this fiscal year will continue to be a major challenge, despite a rise in the number of tax payers. The National Board of Revenue has targeted Taka 2.96 trillion in tax revenue, which is 31.64% higher than the revised one of Taka 2.25 trillion of the outgoing fiscal. In order to meet the target, the authorities should find out new avenues of tax collection instead of imposing double tax and the tax burden on the compliant enterprises.

Tax law of the country. Many new words are coming out recently and need to be incorporated in the Act to help user of the tax law. The existing words are found to be out dated and not compatible with the present day requirement for the purpose of upgrading the Act. More new words may be picked up to make the Act a standard and updated one to help the users. A new section may be introduced under the head “Explanatory Notes” for explanation of new words in the Act for the clear understanding of the subject matter by the users.

Section-13: of the I. T. Ordinance, 1984 is related to decisions of the Tribunal Bench against Appeal Application submitted by the appellants. It is very often found that members of the Bench deliver the Tribunal order without giving su�cient reasoning for their maintaining the disallowances. This is not fair and logical. An assessee has the right to know the reasons for rejection of appeal filed for. But assessee does not get such order.

Delivery of Tribunal order to an appellant has a fixed time limit. But it is not followed by the members of the Bench and takes inordinate delay in delivery of the order for which an appellant becomes questionable before the Honourable High Court submitting a condonation of delay. This delay by the members of the Bench may be avoided if the bench attaches a note for such delay in delivery of the order that would help the

ational Budget for the fiscal year 2018-2019 has just been announced and

placed at the parliament for discussion on fiscal proposals and approval. As a matter of routine discussion, prior to announcement of budget, NBR has completed series of parleys with di�erent classes of people like businessmen, traders, industrialists, professionals, institutions and associations seeking budget discussion as well as amendments in the existing laws. Given previous experience of our proposals for new laws being turned down by authority, this time we thought, rather than bringing proposals for new laws, it will be better to bring proposals for improvement and amendments of the existing laws. The existing law of Income Tax, VAT and other laws contain so many jolts that it is found to be very di�cult for the implementation of the law for the users.

From the provisions of di�erent Acts and laws of the country, we noted that existing laws related to finance are either found inadequate or twisted in nature that do not give meaningful impression to the users.

Now, we want to discuss about incongruous nature of statute of the existing Tax law, VAT law etc. of the country which need immediate reform. Section wise tax statute is discussed below for better understanding and for the removal of doubts in the tax law.

Section-2: of the I. T. Ordinance, 1984 is related to definition of the words incorporated in the

In the immediate preceding year, an amendment is brought in by which loan or gift from spouse or parents shall not be subject to tax if banking or formal channel is used in the process of such loan or gift.

It appears from the amendment that a class of people is kept outside the tax net which is arbitrary and inconsistent. Every assessee should be allowed to enjoy such benefit provided transactions are made through banking or formal channel. Even if a person deposits loan/gift amount to a bank in favour of the recipient of loan for his use may be exonerated from tax.

Section 24: This is related to House Property income where the assessing o�cer exerts his power at his will to estimate rental income of an assessee. No doubt, Tax authority has passed an amendment clearly and transparently for property income under new Rule 8A by SRO-216-Law/Income Tax/2014 dated 18-08-2014. Despite following the Rule 8A by an assessee, some assessing o�cers put his discretionary power to raise the house property income by 3 to 4 times over the actual rent shown by the assessee. These assessing o�cers do not like to consider location, size of the flats building, conditions of the building, area where building is situated and rent rates prevailing in the locality.

Some assessing o�cers increase the house rents without any thoughtful consideration and often harass the assessee house owner for documentary evidences of the bank deposits of the rents although the tax law does not require bank transactions if the rent is less than 25 thousand per month. If the tax o�cials want to increase the house rent they must justify the reasons but they keep doing it on assumption basis on false projection.

So far we understand that no law can refrain some assessing o�cer from

The Author is aChartered Accountant and

a Fellow Member of theInstitute of Chartered Accountants

of Bangladesh-ICAB

N appellant from submission of condonation of delay which irritates the higher authority of the legal forums. Section-16: This is a charging section for levying Taxes on an income under any heads of income under section 20 of the I. T. Ordinance, 1984. The Tax rate needs to be clearly and distinctly mentioned under a schedule for various items like Capital Gain, Rental Income, and Dividend Income etc. Neither the assessing o�cer nor the Tax payer should apply wrong rate of Tax for charging Tax on income.

Desirable Tax Reformsfor an E�ective Taxation System

Akhter Zamil FCA

from recovery of advance from customers under some condition as per set rules of the Bangladesh Bank. Interest on the defaulting advance is calculated and kept in a separate block account. This law is enacted through the Finance Act, 1996 in the interest of the banking companies. When a bank fails to collect principal loan, the recovery of interest on such loan is a remote possibility and should not be reasonable to charge Tax on such interest income.

As such, after long persuasion with the Tax authority, an amendment had been brought to the section 28(3) under which an assessee may take the option either to credit the interest suspense as income in the P/L account of the relevant year or keep it separately until it is actually received whichever occurs first.

Initially, this facility was allowed to Commercial Schedule Banks and Bangladesh Development Bank and Investment Corporation of Bangladesh (ICB). Financial Institutions, Merchant Banks and Investment

estimating House Property income at his will, whims and capricious manner.

To remove such pain and hardship of the building owner (big and small) the tax authority may fix rate per sq.ft. basis of the building considering its location, age and condition of the building, etc. When land valuation is possible by Govt., on area basis, the Rent of the House Property can also be fixed accordingly to help land owner from their hardship, injustice and harassment.

The best solution of the problem will be to fix a rental value of a house on the basis of a yearly rate of inflation in advance as prevalent in the country for that year on the basis of which Rental income will be estimated for charging Tax.

Section 28(3): This section is related to consideration of the interest suspense as income or no income for a year. Interest suspense is considered on defaulting amount of principal loan allowed to customers of Banking sectors particularly, when principal loan is stuck-up

huge operating loss the assessee banks are being compelled to pay huge tax every year because of the unjustified treatment of the bad debt provision by the tax authority. To save the banking sector of Bangladesh, this situation needs to be changed immediately.

Depreciation allowance under Paragraph 4 of the Third Schedule: This is related to Depreciation to be charged on leased assets, paragraph 4 of the Third Schedule had allowed depreciation to leased assets. Some tax o�cers disallow this claim from the view point of ownership of the asset. It is clean from the law that no allowance under this paragraph shall be made for a leasing company but to a lessee on financial lease. Therefore for removal of doubts the law may be amended suitably so that no confusion exists.

Refund of Tax u/s 135 (1c) and section 152 adjustment of I. T. Ordinance, 1984: We have observed that very rarely, tax refund is allowed to the assessee by the NBR even when the assessee is entitled to receive tax refund. Rather in some cases tax o�cials increased the income amount of the assessee to counterbalance the tax refund on a lump sum basis without any legal consideration or explanation even after showing all documentary evidences like contracts, appointment letters, bank statements, VAT & Tax challans etc.

It is very painful for an assessee, when the assessing o�cers

of tax authority. This is only because tax is charged on “provision” by the tax authority. If tax is not charged there would not be any tax on the shoulder of the bank and bank would survive with ease and comfortably.

Therefore, it is time now to rethink the issue for the viewpoint of charging tax on “Provision”. The position of the bank now stands:

• Amount of advance become bad and may be lost

• Interest on advance is lost

• Tax has been paid by bank for making “provision” is also a loss

• Huge expense are being increased in maintaining court cases

Due to such treatment of bad debt provision by the NBR, the banks are losing working capital every year and facing more and more di�culties to continue their operations. Even after

and Bad Debt written o� under di�erent situation of the banking business. When an advance become bad as per Bangladesh Bank requirement an assessee bank is to make provision for Bad and Doubtful debts as expense. But the authority charges tax instantly from assessee. Review in this regard revealed that such tax amount is a huge amount collected not less than Tk 1,000 crores per year from banking sector simply because it is a provision claim on expense. Bad debts which are being actual loss subsequently takes 10 to 15 years to make adjustments over the income in the accounts. On the other hand the tax authority under no circumstances had allowed the claim of bad debt written o� under di�erent pretext or otherwise. But in reality it would have been justified if the tax authority had allowed the claim of bad debt written o� as business loss of the banks. Huge tax on account of provision for bad debt is being accumulated in the hands

Nowadays, the assessing o�cers are applying Tax rates for business income on the income from capital assets and in place of reduced rates, regular rates are being applied towards income of an assessee. Because of the wrong application of Tax rates by tax authority, assessees su�er a lot and are required to submit appeal application to di�erent legal forums, consequently appellant has to pursue the appellate authorities and tribunal authorities. It takes long time to resolve the issue. Revised orders after appeal order remain hanging in balance. This practice has to be removed to avoid delay in collection of Tax and finalization of Tax liability.

Section 19 (28):This section is applicable to a person who received any sum or aggregate of sums exceeding Tk. 5.00 (Five lakh) as loan or gift otherwise than by a crossed cheque or bank transfer, shall be treated as income in the hands of the recipient of the said loan or gift.

• Imports of Raw materials for its own consumption;

• TDS, collection of Tax u/s 53F (1) read with clause (c) to follow;

• Books of account to be maintained in regular manual u/s 35 I. T. Ordinance, 1984.

Languages used in the statute are found to be clumsy and ambiguous, each section found to be conflicting against each other. Thus it becomes a fictional law. In order to introduce minimum tax, the authority should clearly indicate the amount of income (source) and rate of Tax applicable to find out Minimum Tax. Instead of that few sections as are mentioned in section 52 through 55 for the minimum Tax. Again ‘proviso’ is attached with sub-section (2) under which sources of some persons u/s 52 shall not qualify for minimum tax under sub-clause (i), (ii) & (iii) of proviso. To get the benefit of minimum Tax evidence will be required to maintain books of account u/s 35 of the income tax Ordinance. By another clause (d) of sub-section (2) some words are brought under sub-section (9). These are “regular manner” “applicable rate” under which if Tax is calculated, tax found to

for an assessee. As such law should be made simple, clear and easy for compliance. Audit of return should not go back more than two years wherein section 93 exists.

Section 82C: This section has been introduced first in the year 1998 with few items brought under this section for its compliance by the assessee. After that almost every year some changes are brought in with new concept and new idea, this time, in the assessment year 2017-2018, the entire section is revised thoroughly with concept of minimum Tax under which an assessee will be required to pay minimum tax. This time we found a lengthy section containing as many as 9 sub-sections with clauses, sub-clauses, ‘proviso’ attach with sub-section. But surprisingly enough, minimum tax has not been defined directly; on the other hand, huge restrictions are imposed for the users.

Enjoying the benefit of any minimum tax by an assessee is subjected to certain conditions.

• Section 52 through 55 is considered for minimum tax;

• Persons of section 52 shall not be considered u/s 82C;

• Accompanied by a copy of bank statement or account statement in support of any sum or aggregate of sums of loan exceeding taka five lakh taken from any person during the income year;

• The Return does not show receipt of gift during the year;

• The return does not show any income chargeable to Tax at a rate reduced under section 44;

• The return does not show or results any refund;

• Investment made by assessee will not be questioned if the assessee shows income at least not less than 20% of the capital investment in business or profession within the income year and pay tax on such income before filing of return;

• The initial capital investment or profession shall not be transferred from the business within the income year when the investment was made or within 5 years from the end of that income.

All these conditions have made the law volatile and complicated for the assessee. Therefore, we propose to delete these sections or make an option for the assessee to enjoy the benefits of this section following a minimum terms and conditions as may be possible and practicable:

Compliance of so many conditions is a rigorous exercise


ARTICLE

refund due to an assessee within the time limit (30 days), such failure on the part of DCT shall be construed as misconduct.

Section 178: Before we criticize this section we would like to let the readers know that we have experienced and observed such instances where the assessee was declared ex parte on the ground that the assessee never showed up for the appeal, but the reality was the assessee never received the notice of the appeal from the concerned authorities.

Nowadays, mode of communication has been widened by means of Telephone, Internet, SMS, personal contact etc. which can be used to communicate the assessee.

The Tax authority may take action against the persons who found to be negligent in his duties. The delay in delivery of notice, in proper time, makes the appellant questionable before C. T. Appeal, Appellate Tribunal and Honourable High Court.

refuses to allow Tax refund to the assessee, or does not allow Tax Credit against future assessment. Though u/s 152, it is clearly stated that any refund or repayment is found to be due to any person, the amount to be refunded or repaid or any part thereof may be set-o� against the Tax or be treated at the option in writing of that person as payment of Tax payable under section 64 or section 74.

As per section 135(1A) where any amount of Tax is refundable in consequence of any order, The Deputy Commissioner of Taxes shall specify in the notice, the sum refundable to the assessee together with a copy of an assessment order and a refund voucher unless such refund is set-o� against tax as per section 152 under section 135 (1B), the refund voucher for the amount due for refund if any shall be issued within a period not exceeding thirty days from the date of assessment.

It is also stated in section 135(1c), where the DCT fails to issue refund, vouchers for any

rate, shall be calculated under clause (a) above.

(iii) Minimum Tax under this sub-section shall be aggregate of the amounts calculated under sub-clauses (i), (ii).

Gross receipts are defined under the head explanation:

Sub-section (5) under this section, the provision of both sub-section (2) and sub-section (4) apply to an assessee minimum tax payable by the assessee shall be higher of-

(a) Minimum Tax u/s (2)

(b) Minimum Tax u/s (4)

It means an assessee shall have to pay higher tax in place of minimum Tax.

Sub-section (6) Minimum tax shall not be refunded nor shall be adjusted due for the year or earlier year.

Sub-section (7) In addition to minimum tax an assessee shall pay surcharge, additional interest, additional amount etc.

Sub-section (8) In case of regular tax calculated for any assessment year is higher than minimum tax, under this section, regular tax shall be payable.

Sub-section (9) under this sub-section, words, ‘regular source’ ‘regular tax’ and regular tax rate are defined.

If we sum up section 82C we find that the section consists of nine (09) sub-section 14 clauses and 09 sub-clauses and proviso. This is the lengthiest section appeared in the tax Ordinance

be higher than minimum tax, the higher amount shall be payable. This is contradictory to other sections in the Ordinance.

Again, some restrictions are put into sub-sections under which “set o�” loss or income is not allowable. This is not fair and logical.

Rate of Tax collection for a firm and a company has been fixed in the following manner.

Every firm having gross receipt of more than taka fifty lakh or every company shall irrespective of its profit or loss (including depreciation allow) shall pay minimum tax at the following rates:

There is a ‘proviso’ attached with sub-section (4) under which receipt for an industrial under taking engaged in mandatory its commercial production (0.10%) of such receipts. U/s 4(b), application of minimum Tax has been described.

(a) If an assessee has any income from any source that is exempted from tax or is reduced tax rate, the gross receipts from such sources shall be shown separately and calculation to be made in the following manner.

(i) Minimum Tax for receipts from sources that are subject to regular tax rate, shall be calculated as per (a) above.

(ii) Minimum Tax for receipts from sources that enjoy tax exemption or reduced tax














As a matter of routine discussion,prior to announcement of budget,NBR has completed series of parleyswith di�erent classes of people likebusinessmen, traders, industrialists,professionals, institutions andassociations seeking budgetdiscussion as well as amendmentsin the existing laws.

appellant from submission of condonation of delay which irritates the higher authority of the legal forums.

Section-16: This is a charging section for levying Taxes on an income under any heads of income under section 20 of the I. T. Ordinance, 1984. The Tax rate needs to be clearly and distinctly mentioned under a schedule for various items like Capital Gain, Rental Income, and Dividend Income etc. Neither the assessing o�cer nor the Tax payer should apply wrong rate of Tax for charging Tax on income.



















































































Companies were left out for the above cause. After long persuasion with the Tax authorities “Financial Institutions” are considered for enjoyment of the above facilities with e�ect from 2015 but other organizations like Merchant Bank, Investment Companies are again left out. “Financial Institution” was included in the statute with e�ect from 1st July, 2015. The statute did not mention, whether the amendment of the law is prospective or retrospective. This caused serious confrontation among the Tax authority and assessee. Since principle of interest suspense is admitted and established, it may not be judicious to avoid “Merchant Bank & Investment Companies”. The “Merchant Bank” and “Investment Companies” may also be considered to avail such policy in respect of “Interest Suspense” when these companies are running under the supervision and control of Bangladesh Bank.

Therefore, an amendment in the statute should be brought in to remove the impediments as regards interest suspense in a clear and simple manner. Interest suspense is no doubt a benefit in the hands of the Tax authority if taken into income but loss in the hands of Assessee Company when the recoverability of the principal amount of loan is totally uncertain.

Section 29(1)(VIIIaa) read with Clause-(xv) (xvi) & (xvii): This section is related to the provision of bad and doubtful debt over the advance portfolio








































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Sub-section (5) under this section, the provision of both sub-section (2) and sub-section (4) apply to an assessee minimum tax payable by the as

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