The proposed budget for FY23 is oriented towards development and public welfare, as it prioritises public demands amid an adverse economic situation triggered by the Covid crisis and Russia-Ukraine war, said the Federation of Bangladesh Chambers of Commerce and Industry.
Giving their reaction to the budget proposal placed by Finance Minister AHM Mustafa Kamal in Parliament on Thursday, the FBCCI however voiced concerns regarding the government’s decision to offer money launderers a “no questions asked” opportunity to legalise dirty money.
Addressing a press conference held in the capitals’ FBCCI auditorium on Saturday, the organisation’s President Jashim Uddin said, “The legality of whitening black money will discourage honest businesses to pay taxes regularly.
“The government has proposed to reduce corporate taxes by 2.5 per cent. But instead of that facility, the withdrawal of advance income tax (AIT) and advance tax (AT) will benefit the traders more.”
Investment, trade-friendly taxation biggest challenge
The FBCCI chief pointed out that good governance, proper monitoring, investment and trade-friendly tax management will remain as big challenges against implementing the proposed budget for FY2022-23.
He further said, “Skill, transparency, accountability, monitoring, clear direction for products and services, quality development, and proper strategy must be ensured to implement the development and public welfare oriented budget.
The FBCCI president also proposed to withdraw import duty from solar panels, and recommended that the source tax on exports be kept at the existing rate of 0.5 per cent. “This tax has gone up to 1 per cent in FY23, which will disrupt competitiveness in the global market.”
Speaking about the IT sector, Jashim said, “We need more computers and laptops to build a smart Bangladesh, but now 15 per cent VAT has been imposed on laptop imports. As our local laptop industry is still far from being an established one, the newly proposed VAT will create a barrier against building a digital Bangladesh.”
FBCCI seeks easier, business-friendly tax management
Jashim said, “The National Board of Revenue (NBR) will have to collect Tk 3,70,000 in revenue in FY23, which is an increase of 12.12 per cent compared year-on-year. However, this target is impossible to reach.
“Businesses have been seeking permission to import electronic fiscal devices (EFD) for some time. A fully automated system will help curb harassment by the NBR officials. We want easy and business-friendly tax management in Bangladesh.”
Jashim also recommended forming a “Trade Facilitation Division” under the NBR for separating the revenue collection and policymaking processes.
ALSO READ: IT sector’s demand not reflected in budget: BASIS
The FBCCI chief stated that the government has proposed to reduce the tax rate on imports of HR coil and zinc – raw materials, used for manufacturing galvanized iron sheets or steel products – from 5 per cent to 3 per cent which will help the local industry flourish.
He also urged the government not to increase tax on a number of MS products by Tk 200 at the production level.
Jashim then thanked Prime Minister Sheikh Hasina and Finance Minister AHM Mustafa Kamal for keeping an allocation for the FBCCI Innovative Centre for skill upgradation, research and innovation activities.
The budget would have been friendlier towards local business, investment and revenue collection had the government considered our recommendations, he added.