Finance Minister Abul Maal Abdul Muhith on Thursday proposed to allocate Taka 4,500 crore in the new national budget as incentives for exports and tax cut for garments and other sectors.
In his budget speech in the Jatiya Sangsad this afternoon, he said despite sluggish global market, exports so far posted satisfactory growth.
"We are continuing to provide incentives for encouraging export and market diversification. I propose to allocate a total of Tk. 4,500 crore as incentives for export including Tk. 500 for jute goods," he said.
Muhith said ready-made garment (RMG) sector is one of the main exporting sectors of Bangladesh. This sector is making important contribution to the GDP growth and employment generation, he said.
"As part of our continued support, I propose to reduce the tax rate of the RMG sector from 35 per cent to 20 per cent," he added.
Highlighting the importance of real estate sector in the densely populated country, the finance minister proposed to reduce withholding tax rates for the sector to encourage people to buy small sized flats or apartments.
He said Bangladesh is one of the most densely populated countries in the world where everyday people are rushing towards the city centers to find employment or higher income.
"As a result, the big cities are facing the pressure of excessive population. If we can make the district level towns more attractive with planned housing and commercial establishments, it will reduce unwanted pressure on big cities," he said.
He stressed the need for increasing the demand for small-houses given the scarcity of land against huge population.
Other proposals to support business growth and to encourage entrepreneurship are as follows:
"a) Increase the tax-exempted turnover limit for Small and Medium Enterprises (SME) from Tk. 30 lakh to Tk. 36 lakh;
b) Currently, if any investor of the share market gets any waiver of margin loan and its interest, the amount so waived is treated as income of the investor. We propose to exempt small investors from such income tax if the waiver benefit is up to Tk. 10 Lakh including margin loans and its interests;
c) Extend the Alternative Dispute Resolution (ADR) facility for the assesses who did not submit their tax returns; d) Increase the limit of perquisite for the employers."