The chamber said a three-tier duty structure -- five percent on basic raw materials, 15 percent on intermediary materials and 25 percent on finished products and semi-finished materials -- should be introduced without further delay.

In its budget proposal for the 2004-05 fiscal year, MCCI reminded the government of the tariff disincentives for investment saying "Cascading effect of tax on tax on inputs and finished products is bound to have an adverse impact."

Import duty on capital machinery and their spares should be reduced from 7.5 percent to 2.5 percent for facilitating the growth of industries facing competition from other countries, specially the neighbouring ones, it said.

The chamber, which submitted the proposals to the finance minister recently, said income tax, infrastructure surcharge and licence fees should be reviewed.

The MCCI also suggested reduction of import duty on fungicide, saying it is used for treatment of agricultural crops and the duty should be reduced to its original 7.5 percent in the interest of the country's agricultural development.

It proposed withdrawal of supplementary duty on imported sugar. Currently import of sugar attracts 30 percent supplementary duty in addition to 30 percent import duty.

Customs duties on mobile phone sets should be cut so as to reduce gray market imports, the MCCI suggested in the budget proposal.

It said the tax rate for publicly listed banks and other financial institutions should be the same as the rates applicable to publicly traded companies.

Similarly, non-listed banks, insurance and other financial institutions should be given the same tax treatment as non-listed companies, it added.

The MCCI recommended raising income tax exemption limit to Tk 125,000 from current Tk 90,000 for individuals, considering the gradually rising cost of living.

Presently agro-based processed products are subject to 15 percent Vat. The Metropolitan Chamber said Vat should be realised only on value addition and not on indigenous agricultural products.