DCCI President Shams Mahmud in his initial budget reaction said that the budget has focused GDP growth of 8.2 percent and inflation of 5.4 percent.
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.
NBR revenue collection target is 3 Lakh 30 thousand crore taka which is 9.82 percent higher than the previous fiscal. To attain this high target, NBR needs to widen its tax net, pending tax collection, strengthening manpower in 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 1 Lakk 90 thousand crore taka which is 6 percent of GDP. To tackle the economic challenges, this deficit budget should be utilized for the basic needs of the people. Government will borrow Taka 84,980 crore from the banks which is 3.10 percent higher than the previous fiscal. Allocation in the ADP is taka 2,05,145 crore. Shams Mahmud recommended to allocate more in the health sector under ADP considering the Covid situation.
Corporate tax has been slashed to 2.5 percent for non-listed companies in the private sector. But he suggested to cut 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 percent tax on annual turnover of taka 3 crore for an individual businessman will increase his 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.
source tax on RMG export from 0.25 percent to 0.5 percent will make the sector challenging. He requested to consider and reduce source tax on RMG export. He also welcomed the decision of 1 percent cash incentive to RMG export.
He welcome the government to give 20,000 crore taka stimulus to the MSME sector. MSMEs should get easy access of loan under stimulus, he said. He requested to impose 1 percent source tax instead of 2 percent 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 who will guide the financial sector amid corona pandemic. He urged for better private sector credit flow and easy access of loan under stimulus.
