Businessmen and chamber leaders yesterday welcomed the proposed budget for 2015-16 as the finance minister announced some good initiatives to help domestic industries thrive.
The business leaders also urged the government to ensure proper implementation of the proposed budget and to simplify the taxation system to encourage more people to pay taxes.
“I am very happy with the budget proposal as it will help support local industries. There are a lot of measures to help local industries grow,” Abdul Matlub Ahmad, president of the Federation of Bangladesh Chambers of Commerce and Industry, said.
“The budget is business-, industry- and investment-friendly. The government has also moved to reduce bank interest rates. This budget would create vitality in the economy as its implementation will generate a lot of employment.”
“We appreciate the government for such a good budget proposal.”
The government should simplify taxation system, Syed Nasim Manzur, president of Metropolitan Chamber of Commerce and Industry, told Banglavision, a private television channel.
The government should also widen the tax net, he said. “The government should not allow the scope of whitening black money,” the MCCI chief said.
“Proposing 1 percent tax at source on export value is discouraging for the garment exporters,” said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association.
“We will lose our competitiveness because of the tax as our cost of production will increase further due to the proposal. We want continuation of the current rate of 0.3 percent,” he added,
“We are receiving low prices from the international retailers, and have lost significant bargaining capacity because of the higher costs of production.”
He said they would soon meet the prime minister and the finance minister to lower the tax at source.
The international inspections have increased operating costs of garment makers, and many small and medium factories may face closures from the higher costs and devaluation of US dollar and Euro, he said.
Hossain Khaled, president of Dhaka Chamber of Commerce and Industry, praised the government for taking some positive measures like halving import duty on capital machinery to 1 percent, as well as reducing it for imports of textile sector chemicals.
He also welcomed the proposal to cut listed companies' corporate tax by 2.5 percent, but suggested the government also reduce tax on non-listed companies.
“I don't see much anti-business initiatives in the budget. A lot of positive measures have been proposed in the budget which will benefit the country's industries.”
“I also welcome the proposal of building more special economic zones and giving special incentives to entrepreneurs who invest in those zones, as it will help widen our industrial base,” he said.
He said only the industrial sector should get the scope of legitimising the black money.
Khaled echoed other business leaders in suggesting an easier taxation system to help widen the net and boost collections.
The government must cut the hassles of paying taxes, he said.
The GDP growth target of 7 percent is achievable; but only with political stability and a rise in private sector investment, said Asif Ibrahim, chairman of Business Initiative Leading Development, a public private initiative for trade policy formulation.
Increase in public sector investment is noticeable but private sector investment has not responded accordingly, he said.
“Reduction of VAT for the garment sector's compliance related items is a good decision. The implementation of the special economic zones must be expedited to increase the investment to GDP ratio,” he said.
Increase in import tax for transformers is not a good decision, as industries require the machine as a source of power, he said.
Overall the budget is in line with the government's vision; however, more incentives for the private sector would have been nice, said Ibrahim, also a former DCCI president.