Budget to encourage business: DCCI
The Dhaka Chamber of Commerce and Industry (DCCI) yesterday said the budget for fiscal 2017-18 passed in parliament would encourage business and private investment.
DCCI also welcomed the government move to suspend the uniform 15 percent VAT for two years, saying the decision would boost private sector economic activities and accelerate economic growth.
The parliament yesterday passed a Tk 4,00,266 crore national budget for 2017-18.
Earlier on June 1, Finance Minister AMA Muhith had proposed a flat 15 percent VAT scrapping the current multiple and package VAT rates. He also proposed to increase excise duty by 60 percent on bank deposits, sparking vehement criticism from the business community and cross section of society.
DCCI is the first chamber to come up with a formal reaction on the amended budget.
The chamber believes that the government's move to postpone the new VAT law would downplay apprehensions of a steep price hike for a wide range of products and services along with inflationary stress on the economy.
The DCCI said, “With the decision of deferment of the new VAT and SD Act 2012, product and services like construction materials, biscuit, juice, spice, transport, apartment, furniture, ICT enabled services, electricity and restaurant etc. may not experience price hike as feared by the cross section of consumers”.
Currently, 20 types of services are under the purview of truncated VAT facility and 179 products enjoy tariff value facility.
The decision of rationalising excise duty on bank accounts would persuade small and medium enterprises, lower middle and middle income groups into saving more in banks.
DCCI said the unchanged higher threshold of corporate tax rate in approved finance bill is a discouraging factor for local and foreign investment as well as export diversification.
However, further reduction of corporate tax for readymade garments to 12 percent from 15 percent and for green factories to 10 percent from 14 percent will encourage the sector to expand business and make new investment, said the chamber.
DCCI also appreciated the move to withdraw the proposal of increased Supplementary Duty (SD) on completely knocked down (CKD) motorcycles. It said the move to keep the SD unchanged will help the local motorcycle industry grow and attract fresh investment.
In addition, the move of reduction of SD on locally assembled refrigerators will encourage entrepreneurs to set up import-substitute new industries, according to the DCCI's statement.
DCCI also welcomed the decision to withdraw the proposed import duty on solar panels, saying it would support green energy initiatives and keep prices of solar panels at affordable levels.