The Bangladesh Chamber of Industries sees a lack of proper outline in the proposed budget for the next fiscal year to overcome the ongoing economic crisis caused by the coronavirus pandemic.
The opportunity for legalising undisclosed money in the budget is completely unacceptable and it will discourage compliant taxpayers, the chamber said.
BCI president Anwar-ul-Alam Chowdhury Parvez in his budget reaction said that the government should have been more pragmatic in setting the target as the proposed 8.2 per cent GDP growth target was ambitious.
The BCI president thought that the government borrowing for deficit financing would have adverse impacts on the private sector credit growth.
The government proposed to allocate 11.2 per cent of the total budget to the transport and communication sector but the allocation was not important immediately and the money should rather be included in the incentive package to revive the rural economy, the trade body said.
Parvez demanded a special package for developing new entrepreneurs as unemployment would increase due to the COVID-19 pandemic.
He urged the government to withdraw the 2-per cent source tax against local letters of credit for essential commodities as the imposition would increase the prices of daily essentials.
The BCI president also demanded the continuation of source tax at the rate of 0.25 per cent for the export sectors.
The chamber, however, thanked the government for reducing the corporate tax and increasing the tax-free income threshold for individual taxpayers.
The Bangladesh Textile Mills Association in its reaction said that it would be challenging for the textiles and readymade garments to survive in the international market in the context of the Covid-19 pandemic as the government proposed 0.5 per cent withholding tax on export.
BTMA president Mohammad Ali Khokon requested the government to set the rate of source tax at the previous rate of 0.25 per cent.
The trade body also demanded an increase in the existing alternative cash assistance from 4 per cent to 10 per cent for six months only to compensate for the losses faced by the export-oriented textile mills because of the aggressive promotional strategies taken by competing countries.
BTMA also proposed to waive the value added tax for all kinds of textile mills which lost Tk 20,000 crore worth of local yarn demand generated through Pahela Baishakh, Eid-ul-Fitr and Zakat because of the general holiday this year.
The BTMA president thanked the government for proposing a tax holiday facility in the budget to encourage the establishment of a man-made fibre manufacturing industry.
The Business Initiative Leading Development in its reaction on the proposed budget said that the massive deficit financing from the banking sector might to crowd out private sector credit which had already been sinking due to the pandemic.
It termed the government set revenue collection target ‘a bit ambitious’ considering the present situation as it was 9.8 per cent higher than the revised target.
Considering the global economic loss and impact on businesses in the country, the 8.2 per cent growth target would also be almost difficult to achieve, BUILD opined.
The organisation, however, said that the government had rightly focused on health, education, agriculture and employment and all the announced policies and the allocated budget for these areas needed to be spent and managed ethically and practically.
BUILD recommended for a credit guarantee scheme for small entrepreneurs and demanded collateral-free loans for cottage and micro entrepreneurs.
It also said that the continuation of 1 per cent incentives might not be enough for the country’s apparel exporters and tax at source should remain at last year’s rate of 0.25 per cent.
Progga and the Anti-Tobacco Media Alliance in its reaction said that the government had lost the opportunity to collect Tk 11,000 crore in additional revenues from the tobacco sector by not taking into account the recommendations of the health ministry.
The organisations alleged that the four-tier pricing of cigarettes remained untouched and it would encourage the youth to take up smoking or continue with the habit.
The proposed budget also lacks any significant initiative to curb the use of bidi which is very detrimental to public health, PROGGA and ATMA said.
To encourage the export of tobacco and tobacco products, the budget proposed to retain the export duty exemption facility for processed tobacco, the organisations alleged.
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