‘Agri output up for higher budget outlay’

Bangladesh is enjoying a big rise in overall agricultural production as it had increased public expenditure on the sector in the outgoing fiscal year of 2022-23, said Ahsan Khan Chowdhury, chairman and chief executive officer of Pran-RFL Group. 

And such allocations should be continued for sustaining the progress, said the chief of the largest food processor and exporter and household product manufacturer in an interview with The Daily Star earlier this week.

"Agriculture should get priority in the upcoming budget and it is necessary to jumpstart the economy," he said.

In this regard, he cited that the government had hiked allocation for the farm sector to Tk 24,224 crore for the current fiscal year, which was 50 per cent higher year-on-year.

Chowdhury said also lauded a 2.5 percentage point cut in corporate tax provided by the tax authority for companies and added that further reductions would act as an incentive for investment.

"A corporate tax cut could also be an incentive for export. This may encourage foreign investors to invest in Bangladesh," he said.

"Time has come to offer an investment-friendly budget to create jobs and reduce the ongoing economic downturns and encourage people to invest extensively," he said.

Reduction of source tax on supply of raw materials to four per cent from seven per cent in the previous year enabled companies to reduce costs. Otherwise, prices would have increased further, he added.

Imposition of a 20 per cent regulatory duty on imported fruits, biscuits and cosmetics has been beneficial for local industries too. "We have seen the result instantly. People are consuming more locally produced fruits and bakery products," he said.

However, there have been some negative effects of tax measures in the current fiscal year, he said.

Imposition of a 5 per cent value added tax (VAT) on locally made refrigerators was a disincentive for the domestic manufacturers. It is affecting the advancement of the sector, he said.

Looking forward, Chowdhury urged the tax authority to withdraw an existing 2 per cent tax deduction at source on supply of all crops. He also demanded slashing the same on supply of raw materials.

Pran said it has over 100,000 contract farmers across the country.

The group, which exported $532 million-worth foods and other items in fiscal year 2021-22, also had some suggestions for facilitating exports.

Chowdhury urged the National Board of Revenue (NBR) to provide bonded warehouse benefits, meaning the opportunity of duty-free import of raw materials to make export items, at any place in the country.

He also demanded easing rules regarding import of raw materials under the bonded warehouse privilege for exporters.