Businesses seek reduced tax burden in FY 21 budget

Staff Correspondent

30th June, 2020 11:26:29 printer

Businesses seek reduced tax burden in FY 21 budget

Terming the FY 21 budget as a people-friendly one, business leaders said the budget should put more focus to promote trade and business which have been hit hard by the coronavirus pandemic.

They said there are certain provisions in the budget which are not that much business-friendly and might create pressure on trade and business.

Calling upon the government to reduce tax and VAT burden from business, the trade body leaders said if businesses get sluggish, it would affect jobs and the government’s revenue income.

Parliament on Tuesday passed the Tk 5.68 trillion national budget for the fiscal year 2020-21, with the slogan ‘Economic Transition and Pathway to Progress’.

Shams Mahmud, president of the Dhaka Chamber of Commerce & Industry (DCCI), said there is no doubt that Prime Minister Sheikh Hasina has focused on an inclusive budget for all classes of people.

“But some new initiatives or provisions in the budget for FY 2020-21 might not be much business-friendly,” said the DCCI president, adding that trade and business are quite sluggish now due to the coronavirus pandemic.

Tax on minimum turnover, advance income tax and some other provisions will shrink down the working capital of business, he continued.

Everyone understands that national revenue authority has to increase tax, but that should not be through creating tax burden on a certain class, said Sham Mahmud, adding that introduction of online return system will increase tax collection.

Foreign Investor’s Chamber of Commerce and Industry (FICCI) president Rupali Chowdhury thinks the government should focus on revenue collection by making trade and business more active.

Due to the economic stalemate caused by the pandemic, trade and business have turned sluggish and entrepreneurs are fighting to survive amid the jolt. Even some companies have started reducing their workforce, hitting the entire employment and it would increase in the coming months.

At this time of economic hardship, the budget should have more initiatives to encourage trade and business for the revival of the economy, the FICCI president said.

Earlier in a joint statement, MCCI and DCCI said the inclusion of new provisions will increase the financial burdens on business, make doing business more difficult and expensive and also penalise compliant businesses.

Readymade garment makers have sought to keep source at tax 0.25 per cent which the budget increased to 0.50 per cent.