The International Business Forum of Bangladesh on Thursday said that the government should establish discipline in the financial sector to ensure benefits of the proposed budget for people.
At a press conference held at the National Press Club in capital Dhaka on the proposed national budget for the next financial year, IBFB president Humayun Rashid demanded good governance and restructuring of the banking sector through forming of a bank commission to expedite the economic growth of Bangladesh.
Demanding more allocation for the annual development programme, he said that Vision 2021 and implementation of sustainable development goals might be hindered due to higher allocation for unproductive sectors in the budget.
For ensuring steady growth of economy the government should allocate at least 45 per cent of the total budget for development sector, Humayun said.
He said failure in achieving budget implementation capacity was a key challenge and the government would have to form an independent body comprised with the representatives from the private sector to evaluate the implementation capacity.
The IBFB president said that the four-stage value-added tax system would increase the prices of goods and services up to 37 per cent due to lack of rebate policy and consumers would be affected.
Humayun demanded withdrawal of VAT on the import of soya bean oil and liquefied petroleum gas saying that it would create additional pressure on middle- and lower middle-income groups of people.
He also demanded increasing direct tax in the budget saying that indirect tax affected poor and lower income groups while direct tax mainly affected rich people.
Humayun said direct tax in the proposed budget was 35 per cent while indirect tax 65 per cent.
‘It’s a bad news for the lower-income group of people that the government has proposed to increase source tax on the interest of savings certificates to 10 per cent from 5 per cent and at the same time it raised the limit for net wealth of surcharge to Tk 3 crore from Tk 2.25 crore,’ he said.
The IBFB president demanded increasing tax-free income limit to Tk 3 lakh and reducing corporate tax rate to encourage investment.
Humayun demanded special allocation for the development of Rangpur and Rajshahi divisions saying that highest number of poor people lived in the areas.
He also said, ‘If the government allows investment of untaxed money in the underdeveloped areas in the country, huge number of employment would be generated.’
Replying to a question, IBFB director Md Mozibur Rahman suggested that the government go for foreign sources to meet deficit financing and said that the government bank borrowing might hinder the private sector credit flow.
He also said that it would not be possible to bring down the interest rates of bank loans to single digit without reducing nonperforming loans in the sector.
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