‘Tackling inflation key challenge for new budget’
Enhancing private sector investment, employment generation, revenue shortfall and financing are some of the challenges of the proposed budget, said Rizwan Rahman, president of the Dhaka Chamber of Commerce and Industry (DCCI).
In order to attain the targeted gross domestic product, the government needs to focus on gradually widening the tax net, automation of tax structure, fixing up rational target of revenue collection and consistent government expenditure, he said today.
Budget implementation is a great challenge, he said in his initial reaction from the chamber's building in the capital on the proposed budget for fiscal year 2022-23 today.
The inconsistency between income and expenditure in the proposed budget may lead to dependency over bank borrowing or loan from foreign source, he said.
The chamber thinks that a planned, timely, cost-efficient and implementable budget is more effective than a big budget.
Since the middle- and lower-middle income group of the society are facing the pressure of inflation, taking it into consideration, the limit of individual income tax can be increased, Rahman said.
However, few slabs can be created for the higher income level group but obviously in a rational manner, he said.
Listed companies offloading more than 10 per cent of their paid-up capital to the market through initial public offering only can avail the opportunity of giving 20 per cent corporate tax.
And both listed and non-listed companies who do transactions through banking channel and have cash expenditure or investment of Tk 12 lakh annually are eligible to give 20 per cent corporate tax.
If any listed company fails to comply with these two conditions, they will have to pay 25 per cent corporate tax.
The Dhaka Chamber feels that the threshold or limit in these conditions are very insignificant.
Moreover, the corporate tax rate should be reduced to be more competitive not only in the international market but also in the local market.
This year from July to May, Bangladesh's export earning was $47.17 billion against import expenditure of $68.87 billion with the trade deficit hitting $21.7 billion.
It seems that Bangladesh's import expenditure is higher than the export earnings, Rahman said.
"Import expenditure over export earning is not good for our international trade. We need to promote export diversification. Equal corporate tax for RMG and non-RMG export sector will facilitate diversification process."
"24.9 per cent investment from the private sector is targeted. But for that, private sector credit flow should be increased," he said.
Implementation of the annual development plan till May 2022 was 58.36 per cent, which is not satisfactory.
Mega infrastructure projects should be completed at a faster pace but in a lower price ensuring transparency and accountability.
Clause number 83, 84 and 100 of goods seize provision need to be reformed, Rahman said.
The budget should have a clear guideline on product diversification and remittance inflow.
The president of the leading trade body also requested the government to formalise Facebook-based entrepreneurs.