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The Bangladesh Chamber of Industries (BCI) has identified controlling inflation as the primary challenge in implementing the proposed budget for the fiscal year 2023-24.
BCI President Anwar-ul Alam Chowdhury (Parvez) expressed concerns over the government’s target of keeping inflation within 6 per cent while the current rate stands at over 9 per cent.
Finance Minister AHM Mustafa Kamal, in his budget speech, emphasised attracting domestic and foreign investment, employment creation, and promoting the production of import substitute products. However, the budget lacks clear instructions for developing domestic industrial capacity and sustainability, particularly for micro, cottage, and small industries, said Anwar-ul Alam Chowdhury.
The BCI president highlighted that these sectors have already suffered a 45 per cent decline due to the impact of the Covid-19 pandemic and the Russia-Ukraine conflict. He also noted that revenue collection heavily relies on the private sector, but people’s purchasing power is decreasing due to high inflation, the dollar exchange rate, and the energy crisis. This has resulted in a slowdown of growth in productive industries.
Additionally, private sector credit growth is declining, and exports and remittances are not growing as expected. The BCI urged the government to focus on importing alternative industries and taking measures to revive the growth potential of existing industries and factories. However, the budget does not provide specific instructions in this regard.
The BCI president emphasised the need to prioritize the country’s economic progress over adhering to the conditions set by the International Monetary Fund (IMF). He called for efforts to strengthen local industries, promote import substitution industries, and sustain employment.
While the BCI welcomed the increase in the tax-free income limit for individuals to Tk 3.5 lakh, they suggested raising it to Tk 5 lakh considering the high inflation and cost of living.
The BCI expressed concerns about the imposition of a minimum income tax of Tk 2,000 on TIN holders who are not taxable. They argued that this would burden low-income individuals amidst high inflation and called for the withdrawal of the proposal.
The total revenue target for the fiscal year has been set at Tk 5 lakh crore, with the National Board of Revenue (NBR) aiming to collect Tk 4.30 lakh crore, an increase of 16.20 per cent compared to the previous year’s revised budget. However, revenue collection in the current financial year is only 61 per cent of the total target as of April. The collection of revenue will be challenging due to the existing dollar crisis and various import restrictions.
The BCI also highlighted that more than 80 per cent of the total tax is collected from Dhaka and Chattogram, while about 45 per cent of the country’s economy is located in other districts. They suggested appointing the necessary manpower to approach people in these areas with a positive attitude to increase tax collection and expand the tax net.
