Dhaka Chamber of Commerce and Industry (DCCI) President Shams Mahmud in his initial budget reaction said that the budget has focused GDP growth of 8.2 per cent and inflation of 5.4 per cent.
He termed the budget a progressive and high growth targeted one, which is appreciable. DCCI also appreciates initiative of increasing investment and employment.
The budget is an inclusive one despite it is a huge expenditure budget which aims to increase investment, stimulus to the entrepreneurs, ensure social safety net. But to implement this huge budget is a big challenge, therefore, we need to re-consider revenue collection target, Mr Mahmud mentioned.
NBR revenue collection target is Tk 3.30 trillion (3 lac 30 thousand crore taka) which is 9.82 per cent higher than the previous fiscal. To attain this high target, NBR needs to widen its tax net, pending tax collection, strengthening manpower at the upazila level for more tax collection. But the tax burden should not be imposed on the existing tax payers, Shams Mahmud said.
Deficit budget is Tk 1.90 trillion (1 lac 90 thousand crore taka) which is 6.O per cent of GDP. To tackle the economic challenges, this deficit budget should be utilised for the basic needs of the people.
Government will borrow Tk 849.80 billion (Tk 84,980 crore) from the banks which is 3.10 per cent higher than the previous fiscal. Allocation in the ADP is Tk 2. 05 trillion (Tk 2,05,145 crore). Shams Mahmud recommended allocating more in the health sector under ADP considering the Covid-19 situation.
Individual income tax limit has been increased to Tk 0.3 million from existing Tk 0.25 million. DCCI appreciates the decision. The lowest limit of tax rate is 5.0 per cent and the highest tax rate is 25 per cent. It may ease burden on tax payers and more taxable people will be encouraged to pay tax, he said.
Corporate tax has been slashed to 2.5 per cent for non-listed companies in the private sector.
But he suggested cutting corporate tax a bit so that entrepreneurs may sustain in post-Covid situation. He also thanked government for increasing time limit of paying tax and VAT without penalty.
But 0.5 per cent tax on annual turnover of Tk 30 million (taka 3 crore) for an individual businessperson will increase his/her cost of doing business, Shams Mahmud said.
Shams Mahmud said VAT calculation should be based on product’s value addition or its profit. He also urged for automated VAT return system, simplification of refund system.
Shams Mahmud welcomed the government for giving stimulus to the industries.
But he requested to give advance income tax waiver and waiver of advance tax on RMG, leather, jute and jute goods and agro-processing sector.
Due to lower export order, DCCI president said source tax on RMG export from 0.25 per cent to 0.5 per cent will make the sector challenging. He requested to consider and reduce source tax on RMG export. He also welcomed the decision of 1.0 percent cash incentive to RMG export.
He welcomed the government to give Tk 200 billion (20,000 crore taka) stimulus to the MSME (micro, small and medium enterprise) sector. MSMEs should get easy access of loan under stimulus, he said. He requested to impose 1.0 per cent source tax instead of 2.0 per cent source tax on local LC used for importing essential commodities.
Shams Mahmud urged to form a high powered advisory committee for financial sector under the Bangladesh Bank that will guide the financial sector amid corona pandemic. He urged for better private sector credit flow and easy access of loan under stimulus.
The budget allows to invest undisclosed money in the real estate, bank deposit, national savings tools and stock market. It will help inject money through private investment in the economy especially in corona situation, he added.
DCCI president urged to allocate more in the health infrastructure under ADP. He also underscored speedy implementation of fast track mega projects.
Subsidy in the agriculture sector has been increased to Tk 95 billion (Tk 9,500 crore) which is appreciable, he said.
Tk 50 billion (Tk 5,000 crore) has been allocated for agriculture re-financing scheme, and it will boost the agriculture sector. But more storage capacity is needed, he pointed out.
Skilled development and infrastructure are needed in the health sector to combat corona like pandemic. Sufficient allocation is necessary to combat any pandemic in future. He proposed to start health insurance. Private hospitals also should come under proper monitoring, he said.
He hailed the decision of allocation of Tk 955.74 billion (Tk 95,574 crore) for social safety net programme. Poverty increased due to coronavirus. The poor and ultra poor community should come under this social safety net, he commented.
The DCCI president said sustaining existing employment is more challenging than creating new employment at this moment. The budget should have an allocation for up-skilling and re-skilling of the young generation, he mentioned.