Tax rate cut to boost production, employment: Kamal

Finance Minister AHM Mustafa Kamal on Friday defended the proposed tax rate cut, saying that the move is necessary for employment generation and increasing production.

He said that industrialisation would get momentum once businesspersons get fiscal benefits.

“It is a win-win situation. We will be the winner,” he told a post-budget online media conference, a day after unveiling a Tk 6,03,681 crore budget.

Minister Kamal said the government had previously tried to increase revenue collection by keeping the tax rate high.

“The tax rate should be flexible. We will lag behind developed countries if we fail to keep pace with them,” he adds.

He said the government provided monetary policy supports to the business community to take the economy forward. “This time, we are thinking differently and gave a tax waiver to create employment,” said Kamal.

The private sector should take the lead in employment generation and the government has to provide assistance. Tax waiver is an incentive to this end, he said.

“The government is open and very business friendly,” the minister said.

‘Ensuring equitable justice’

Responding to a question, Kamal said the government backtracked from providing the money whitening facility in the proposed budget after analysing all aspects.

“There were mixed reactions. One group insisted on keeping the provision while the other opposed it,” he said.

There are two dimensions to allowing untaxed money whitening.

“On one hand, it contributes to the economy but hinders equitable justice on the other,” the minister said.

‘7.2pc growth target achievable’

He hoped that the Gross Domestic Product would surpass the projected 7.2 per cent growth target in the next fiscal year as all indicators of the economy remained robust and healthy.

“We have achieved the targets set in previous budgets. A 7.2 per cent GDP growth is achievable ... all economic indicators are positive too,” he said.

The minister was also optimistic about reaching the revenue collection target.

“We are simplifying the tax Act and set targets based on revenue areas while focusing on widening the tax net,” said Kamal.