The Bangladesh Chamber of Industries on Saturday termed ‘impractical’ the government’s revenue collection target, set at Tk 3,39,280 crore, in the proposed budget for the 2018-2019 fiscal.
It also said that the high revenue collection target would impact negatively on the production sector.
The BCI made the comments in its initial reaction to the proposed budget based on a meeting of the chamber’s top officials presided over by its president Mostafa Azad Chowdhury Babu.
The BCI said that the projected revenue collection target was 33 per cent higher than the revised budget of FY18 despite the fact that the actual revenue collection rate was around 14-17 per cent in the last two years.
The chamber also suggested that the revenue collection growth target should be set within 15 per cent.
Besides, it said, the proposed budget lacked measures to extend the tax network and so the high revenue collection target would create pressure ultimately on regular taxpayers.
About the tax-free income limit, the BCI said that the tax-free income limit was much higher than the per capita income in the developing countries.
The chamber said that as the tax-free income limit amount of Tk 2.5 lakh was not enough for a person to meet demands of a four-member family, the limit must be set at Tk 3.5 lakh to allow the person to meet the family’s basic needs.
About the corporate tax cut of 2.5 per cent for banks, non-bank financial institutions and insurance companies, the BCI said that only the banks which would be able to keep their interest rate spread within 3 per cent and would be able to fulfil the loans disbursement target for agriculture, industrial, export of SMEs and women entrepreneurs should get the facility.
The chamber criticised the government’s budgetary move to waive 25 per cent duty over export of tobacco products.
Citing the policy as going against public health, it said that such exemption of tax would encourage tobacco cultivation and loss of fertility of agricultural land.
The value-added tax on IT-based services was increased to 5 per cent from 4.5 per cent, which would affect negatively on the sector, the chamber said.
E-commerce business was kept out of VAT but VAT would be applicable in case of direct sales, which would create ambiguity, the BCI said.
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