The government should prepare a two years' survival plan for businesses, outlining different recovery guidelines, to safeguard the country's trade and economy amidst the pandemic, said businesses yesterday.

For instance, the government should withdraw the proposed advance income tax and value added tax on imports, said Syed Ershad Ahmed, president of the American Chamber of Commerce in Bangladesh.

In the recent budget, the government proposed a 2.25 per cent reduction in corporate tax whereas it should be at least 5 per cent as the businesses are suffering now, he said.

Ahmed also said the country has only five million tax identification number (TIN) holders, among whom 50 per cent pay tax while the rest are irregular.

So, the tax net should also be widened for more revenue generation, he said, adding that the government should also come up with a major plan in education.

He expressed disappointment on the imposition of VAT on educational institutions, saying in such a critical time it would ultimately be a burden for students' families. Ahmed also suggested that the same persons should not formulate tax policies and collect taxes.

Ahmed was addressing a post-budget webinar on "tax and tariff implications on trade and commerce" organised by the Bangladesh German Chamber of Commerce and Industry (BGCCI). Shahed Akhter, executive director of the BGCCI, moderated the discussion.

Corporate tax was reduced by some 7.5 percentage points over the last four years, pointed out Mosharraf Hossain Bhuiyan, Bangladesh's ambassador to Germany, suggesting strengthening implementation of allocations in social safety net programmes.

Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), demanded 10 years' tax holiday for investments on manmade fibres, reasoning that the country needed a lot of this investment to meet global demand.

Mohammed Humayun Kabir, chief executive officer of Shinepukur Ceramics, said the parliament holds no wide discussion on the supplementary budget to know the difference between the allocation and revised spending.

Sometimes the gap is big and so the discussion is important to know whether money is being spent on the same old things, he added.

Without a massive reform in fiscal management, the private sector investment to GDP ratio might not improve, he said.

For many years, this ratio has remained stagnant at 23 per cent although the budget proposed increasing it to 25 per cent. However, with fiscal reforms, reaching 32 per cent to 35 per cent is possible, he said.

In a keynote paper, Mashuque Ahmed, CEO of Ahmed Mashuque and Co, said the challenges faced by individuals related with refunds and dealings with banks should be raised through a common platform for availing proper solutions.

Hindrances, such as hidden taxes, should be removed to ensure a business-friendly tax policies, he said.

Saad Omar, secretary general of Switzerland Bangladesh Chamber of Commerce and Industry, and Thomas Hoffmann, president of the BGCCI, also spoke.