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 bufget 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.
Individual income tax limit has been increased to taka 3 Lakh from existing taka 2.5 Lakh. DCCI appreciates the decision. The lowest limit of tax rate is 5 percent and the highest tax rate is 25 percent. It may ease burden on tax payers and more taxable people will be encouraged to pay tax, he said.
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.
Shams Mahmud welcome the government for giving stimulus to the industries. But he requested to give advance income tax waiver and waiver of advance tax on RMG, leather, jute and jute goods and agro-processing sector. Due to lower export order, DCCI President said 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.
The budget allows to invest undisclosed money in the real estate, bank deposit, national savings tools and stock market. It will help inject money through private investment in the economy especially in corona situation, he added.
DCCI President urged to allocate more in the health infrastructure under ADP. He also underscored speedy implementation of fast track mega projects.
Subsidy in the agriculture sector has been increased to taka 9,500 crore which is appreciable, he said. Taka 5000 crore has been allocated for Agriculture re-financing scheme, and it will boost the agriculture sector. But more storage capacity is needed, he said.
Skilled development and infrastructure are needed in the health sector to combat corona like pandemic. Sufficient allocation is necessary to combat any pandemic in future. He proposed to start health insurance and private hospitals also should come under proper monitoring, he said.
He hailed the decision of allocation of taka 95,574 crore for social safety net programme. Poverty increased due to corona. The poor and ultra poor community should come under this social safety net. He said sustaining existing employment is more challenging than creating new employment at this moment. The budget should have an allocation for up-skilling and re-skilling of the young generation.