enhancing private sector investment, employment generation, revenue shortfall and financing are some of the challenges of the proposed budget for FY2022-23.
In order to attain the targeted GDP, the government needs to focus on widening the tax net gradually, automation of tax structure, fixing up the rational target of revenue collection and consistency of government expenditure.
President of Dhaka Chamber of Commerce & Industry (DCCI) Rizwan Rahman said these in his initial reaction to the proposed budget for FY2022-23 on 09 June 2022 at the DCCI Building.
The inconsistency between income and expenditure in the proposed budget may lead to dependency on bank borrowing or loans from foreign sources.
Dhaka Chamber thinks that a planned, timely, cost efficient and implementable budget is more effective than a big budget.
Since the middle and lower middle-income group of the society are facing the pressure of inflation, taking it into consideration, the limit of individual income tax can be increased. However, few slabs can be created for the higher income level group but obviously in a rational manner.
Listed companies offloading more than 10% of their paid-up capital to the market through IPO only can avail of the opportunity of giving 20 per cent corporate tax.
And both listed and non-listed companies who have cash expenditure or investment of taka 12 lakh annually and if they do transactions through banking channel are eligible to give 20% corporate tax.
If any listed company fails to comply with these two conditions, they will have to pay 25% corporate tax. Dhaka Chamber feels that the threshold or limit in these conditions is very insignificant.
Moreover, the corporate tax rate should be reduced to be more competitive not only in the international market but also in the local market.
This year from July to May our export earning was USD 47.17 billion against import expenditure of USD 68.87 billion.
The trade deficit is USD 21.7 billion. It seems that our import expenditure is higher than the export earnings. Import expenditure over export earning is not good for our international trade.
"We need to promote export diversification. Equal corporate tax for RMG and non-RMG export sectors will facilitate the diversification process. 24.9% investment from the private sector is targeted. But for that, private sector credit flow should be increased."
ADP implementation till May 2022 was 58.36 per cent which is not satisfactory.
Mega infrastructure projects should be completed at a faster pace but at a lower price ensuring transparency and accountability.
Clause number 83, 84 and 100 of the goods seize provision need to be reformed, Rizwan Rahman said.
