Businessmen have proposed that the individual tax-free income limit should be increased to Tk 5 lakh in the national budget for FY2023-24 as the people of the country are already under pressure due to high inflation.
They also suggested that the decision to increase minimum wages should be taken considering the overall situation of the national economy.
“Not all companies will have the ability to increase wages in the face of the current economic challenges. That’s why we want the individual tax-free income should be Tk 5 lakh, considering high inflation,” said Dhaka Chamber of Commerce and Industry President Sameer Sattar.
“If it increases, the common people will get some relief,” he added.
For the FY24 budget, the government has proposed to increase the individual tax-free income limit from Tk 3 lakh to Tk 3.5 lakh.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Director Arshad Jamal Dipu said that wages in the apparel industry should be increased in line with the current economic situation. “If it increases by 30-40 per cent, many factories will be forced to shut down.”
He said that the salary of RMG workers increases every year by 5 per cent. Right now, the industry cannot give sudden salary hikes.
However, Garment Sramik Sanghati President Taslima Akter believes the industry can increase wages handsomely. She said, “We have seen the garment industry turn around in every case, whether it's Covid-19 or the Russia-Ukraine war. The minimum wage of the workers should be Tk 22,000-25,000.”
The observations of business and labour leaders came at the “CPD Budget Dialogue 2023-An Analysis of the National Budget for FY2023-24,” which was held at a hotel in Dhaka on Sunday.
Economists, educationists, energy experts, garment sector workers' representatives and representatives of various sector-based organisations were present at the dialogue.
Presenting the keynote, CPD Executive Director Fahmida Khatun said, “In the FY24 budget, the underlying assumptions about the key macroeconomic correlates appear to be far from reality.”
She suggested that a mid-term review of the implementation status must be conducted to assess the outcome of the budgetary measures in addressing the ongoing challenges.
Eminent economist and Policy Research Institute Executive Director Ahsan H Mansur pointed out that in the proposed budget, revenue mobilisation is very optimistic despite the very weak performance.
As the chief guest at the dialogue, Planning Minister MA Mannan said that inflation is the main crisis the economy is facing and the government is doing everything to reduce it.
“We are not denying that there are faults in the market. But we are trying to curb the inflation. The lower class people are our priority. So we are giving food to one crore families at an affordable price,” he added.
Power sector and USD crisis
At the dialogue, speakers said that load-shedding has started again as fuel cannot be imported for power generation due to the US dollar crisis. As a result, industrial production is facing disruption and the economy is facing more crises.
Md Maqbul-E-Elahi Chowdhury, a former member of the Bangladesh Energy Regulatory Commission, said, “The main problem of the power sector is the primary fuel crisis. Import dependency for this is not the solution.”
He suggested increasing the allocation in the budget for more gas explorations.
Consumers Association of Bangladesh Energy Adviser Shamsul Alam said irregularities and corruption in the power sector were major problems. “The government is increasing the electricity price without public hearings. The extension of the 2010 special law till 2026 supports these irregularities.”
Jatiya Party Presidium Member Anisul Islam Mahmud said that the government’s wrong policy was behind the USD crisis. “The exchange rate remained at Tk 80-84 for the last decade. And it suddenly increased by Tk 20, which destroyed the competitiveness in the export sector.”
BNP Standing Committee member and former commerce minister Amir Khosru Mahmud Chowdhury said that the USD crisis was created due to the government's misuse of foreign exchange reserves.
Due to the lack of good governance, the loans taken from Export Development Fund have been laundered abroad. This is also one of the reasons for the dollar crisis, he added.
CPD’s Distinguished Fellow Dr Debapriya Bhattacharya, who moderated the dialogue, criticised the draft Income Tax Law and said it brought non-profit organisations under the corporate tax.
Such proposals are bureaucratic measures that are conflicting with the implementation of the SDGs or any other development goals, he stressed.
