In Bangladesh, the corporate tax rates range between 20 per cent and 45 per cent now. In the last three national budgets, the non-listed companies' tax rate in the stock market has been reduced by 2.5 percentage points.

Reduced tariff rates imply lower import costs for foreign investors that want to bring in raw materials or components for production, the survey found.

The FICCI report, titled ‘Catalysing Greater FDI for Vision 2041: Priorities for Building a Conducive Tax System in Bangladesh’, was handed over to Prime Minister Sheikh Hasina at a recent event in Dhaka.

If the tax rate is increased by 20 per cent over the next 10 years, then GDP may only rise by less than 6 times, and revenue collection may increase by less than thrice, the report indicated.

An increase in the tax rate may lead to a higher growth in both FDI and revenue, while a reduction in the tax rate could result in an even greater increase in both, domestic media outlets cited the report as saying.

The Policy Research Institute of Bangladesh, on the other hand, feels a 30 per cent depreciation of the local currency could result in a 30 per cent rise in customs duty.

Fibre2Fashion News Desk (DS)