MNA Business Desk: Co-operative leaders have urged the government policy-makers including the Ministry of Finance to withdraw 15 per cent income tax on co-operative societies.
The Co-operative Credit Union League of Bangladesh Limited (CCULB) in a statement signed by its Chairman Jonas Dhaki and Secretary Emdad Hossain Malek, said the existing income tax had been hampering the socio-economic development of distressed and under-privileged people.
The 15 per cent tax was imposed on the income of co-operative societies since 2015. As a result, the formation of capital by small -income societies through small savings, creation of employment, poverty reduction and domestic growth are being hampered.
Like other credit unions, CCULB has been demanding for withdrawal of the 15 per cent income tax on cooperative societies from the very beginning.
But the burden of this tax is yet to be withdrawn. Moreover measures being taken by the authorities concerned to maintain is 15 per cent income tax on cooperstives in the upcoming fiscal budget for 2019-20.
The statement said cooperative societies do not target profit, rather it work for welfare of the societies through development of life style and living standard, in line of the guidance of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman, who wanted to create standard cooperative movement as a pillar of economic freedom of the country’s people.
There are a total of 1,014 self-initiative cooperative societies along with conventional cooperative institutions, which have around six lakh members and the total paid-up capital of them is nearly Tk 30 billion (3,000 crore).
They have formed their fund through small savings of the cooperative members and from this fund they take loan for their own need to become self-dependent. They also invest among the members from this fund.
After maintaining management cost and giving interest for different deposits, according to Cooperative Society Act 2001, from the rest of small profit they distribute 15 per cent for reserve fund, 10 per cent bad-loan fund, 3 per cent for cooperative development fund and others 10 per cent. And rest of the profit has been divided among the cooperative members.
In this circumstance, the profit ratio of the cooperative members is being reduced due to imposition of 15 per cent income tax, which discourage members from saving funds and invest in cooperative business, harming the cooperative movement.