Experts and businesses on Saturday said that the national budget for the next fiscal year 2021-22 should have clear guidelines on the recovery of economy from the COVID-19 fallout.
At a pre-budget discussion organised by the Dhaka Chamber of Commerce and Industry, they urged the government to strike a balance between the revenue target and the facilitating businesses so that the private sector could turn around from pandemic adversities.
‘The next budget should also have a plan of recovery as it was in the last year as the second wave of pandemic is going on and it may have a huge implication on the economy,’ BRAC chairperson Hossain Zilllur Rahman said.
He said that the setting of revenue collection target and achieving the target were inevitable for a budget and at the same time government should consider incentives for the pandemic-hit businesses especially the cottage, micro, small and medium enterprises.
Hossain Zilllur suggested a faster disbursement of loan under the stimulus for CMSMEs, saying that the mobile financial services could be engaged as a delivery vehicle.
‘For the growth trajectory, the domestic market needs to be incentivised beside the export sector as the domestic economy will be a growth driver,’ he said.
The BRAC chairperson said that urban poor were impacted heavily by the COVID-19 outbreak so the budget needs to have an allocation for them and the urban primary health care needs to be enhanced.
Social protection should get priority in the next budget, he added.
DCCI president Rizwan Rahman said that the government should consider a business-, revenue- and industry-friendly budget for the financial year 2021-22.
He said that the budget would have a clear indication for the economic recovery amid the pandemic.
The DCCI president hoped that the next budget would give a special attention to taxation and value-added tax policy, infrastructure, industry, trade and financial sector.
If the government and a vibrant private sector work hand in hand, Bangladesh will be able to regain its economic momentum despite the pandemic, Rizwan said.
‘We should focus on increased revenue collection for development as well as need to facilitate and incentivize businesses. However, if revenue target is not achieved, development work will be halted,’ the prime minister’s economic affairs adviser, Mashiur Rahman, said.
He said that a stable tax and duty regime for 7-10 years was a good move but all investors might not get its benefit as investments do not come at the same time.
‘Our tax-GDP ratio is comparatively low because our tax elasticity is low in the country due to rebates in different levels. But, a social acceptance of tax, VAT, SD and customs duty rate need to be in place having global standards,’ Mashiur said.
Naser Ezaz, chief executive officer of Standard Chartered Bank Bangladesh, sought an easy access to finance for the SMEs.
He said that incentives should be given for export diversification and the existing incentive should be revised in the next budget.
Mominul Islam, chief executive officer of IPDC Finance Ltd, urged for a long-term bond market.
He suggested reducing corporate tax to 30 per cent for non-banking financial institutions for a 5-10 year term.
Asif Ibrahim, chairman of the Chittagong Stock Exchange, said the corporate tax for listed and non-listed companies needs to be slashed.
Kazi Inam Ahmed, president of the Bangladesh Supermarket Association, demanded withdrawing 5 per cent VAT on sales.
Fazlul Hoque, a former president of the Bangladesh Knitwear Manufacturers and Exporters Association, demanded duty-free imports of machinery and other materials for effluent treatment plant saying that ETP should be a must for establishing a green factory.
Md Jashim Uddin, vice-chairman of Bengal Group of Industries, said the next budget should give incentives to the industry sector for employment generation.
For the safety of local industries, he suggested imposing antidumping and countervailing duty if needed.
Bangladesh University of Engineering and Technology professor Mohammad Tamim suggested consideration over tax and VAT on LNG price in the next budget.
The virtual discussion meeting was divided into four sessions — financial sector, industry and trade, taxation and VAT and infrastructure.
The DCCI organised the event in association with Bangla daily Samakal and private television station Channel 24.
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