Lauding the proposed budget for Fiscal Year 2019-20 that was placed before the parliament on Thursday, business leaders came up with their various reactions.
They stressed the need for boosting implementation capacity and ensuring accountability and skill development which would make the budget effective.In their reaction, they viewed this high revenue collection target as challenging for NBR. But to attain this target, the government has to widen the tax net, they suggested.
They came up with their comments at their initial budget reaction on the proposed National Budget 2019-20 through separate press releases on Thursday.
BGMEA president Dr Rubana Huq congratulated Finance Minister AHM Mustafa Kamal for announcing the budget for fiscal year 2019-20.
In her reaction, she said: “This time the government has set priorities on new sectors going beyond traditional line. In the budget, social safety nets have been widened.
In the budget for setting up startup for youths, Tk100 crore has been allocated, Tk50 crore for research and innovation and and 74,365 crore has been set aside for social safety nets.
In the budget, Tk13,000 crore has been set aside for educational sector and an additional amount of Tk3,000 for health sector.Rubana added that the exemption of the garment sector from value added tax of electricity, gas and water and five percent import duty on fire extinguishing instruments will be a great help to the sector.
“It is good news for us as the government is working towards making bankruptcy and insolvency acts that will act as the safeguard for entrepreneurs.”
“But on our demand of providing five percent incentive for the garment industry, the government has granted one percent which amounts to Tk2825 crore. Though the allocation is inadequate compared to our demand, it will be helpful for the industry. BGMEA recommends setting corporate tax rate to be 10 percent but it is kept unchanged.
Stating the industry passing over a crisis period, BGMEA said the industry is losing its capacity to compete with its international counterparts for continuous price fall, hike in production cost.
In the current fiscal, the industry has achieved 12.82 percent growth compared to the previous fiscal which was more than 6.95 percent of its target.
Now the budget is just announced but there has a room for discussion. BGMEA hopes it can solve the existing problem in consultation with the finance minister.
Dhaka Chamber of Commerce & Industry (DCCI) President Osama Taseer in his initial reaction said in the proposed National Budget, revenue collection target has been fixed at 3 Lakh 77 Thousand 810 Crore taka out of which NBR will have to collect 3 Lakh 25 thousand 600 crore.
DCCI thinks this high target will be challenging for NBR. But to attain this target the government has to widen the tax net.
The budget deficit is 1 lakh 45 thousand 380 crore taka. The government will take about 47 thousand 364 crore taka from the banks to mitigate this shortage which is not unfriendly for the business but because of this borrowing private sector credit flow should not be hampered, Osama Taseer said.
ADP will be 2 lakh 2 thousand 721 crore taka which is appreciable. It will expedite infrastructure development in the country. But to ensure transparency, quality and effective monitoring, DCCI requested to strengthen Implementation, Monitoring and Evaluation Division (IMED) like the DCCI proposed National Infrastructure Development and Monitoring Advisory (NIDMAA) model.
Private sector credit flow in the last fiscal year was 12.5% though according to monetary policy 16.5% credit flow was targeted.
According to Bangladesh Bank, non-performing loan is 1 lakh 10 thousand 873 crore taka. 48% of this NPL is from the government Banks. But the budget indicates that from now on, this NPL will not be accelerated more which is very much appreciable.
DCCI hails the decision of forming “Insolvency and Bankruptcy Law”.
For loan rescheduling, the government has to allot a large amount of money every year. As a result this money cannot be used in any development programme. It may fuel the cost of doing business. DCCI hails the initiative of forming banking commission and merger and acquisition.
Implementation of new VAT Act 2012 is a timely initiative. DCCI hopes that this new VAT Act might play an important role in doing businesses. But there should be a provision of Input credit tax under VAT Act 2012 otherwise the extra burden might be borne by the consumers. In that case inflation might go up.
The cost of living tax-free income limit for individual should be revised to Tk3 lakh, DCCI President proposed.
Before implementation of new VAT Act 2012 awareness should be created and DCCI called for simplification of new VAT Act 2012. Besides, VAT collection procedures should also be simplified, he said. He suggested ensuring harassment-free VAT system in the country and reducing corporate tax in order to increase private investment in the country.
“8.2% GDP target is quite achievable but to get benefit out of this we have to create employment generation and attract local and foreign investments.”
Osama Taseer urged operation of one-stop service under BIDA in 64 Districts in the country with the assistance of private sector.
DCCI hails the decision of creating the startup fund of 100 crore taka for young unemployed people so they can avail the fund and start a new venture. But he suggested allocating the fund to the competent, energetic and eligible persons in a transparent manner.
DCCI President hails the decision of slashing registration fee on trading of land and apartments.
DCCI also appreciated the decision of giving 1% cash incentive to the exporters of RMG products.
Praising the government plan of launching Dhaka-Chattogram high speed train and constructing Bay Container Terminal , Chittagong Chamber of Commerce and Industry (CCCI) vice-president Syed Jamal Ahmed urged the government to implement the plan on the priority basis in CCCI’s immediate budget reaction.
“This proposed budget will contribute to the development of SME sector, women entrepreneurship, price hike control and tax collection network,” he said.
Syed Jamal Ahmed also said if the projected 8.2 percent GDP growth can be achieved, it will accelerate the pace of the country’s development.
Real Estate and Housing Association of Bangladesh (REHAB) also lauded the proposed budget and thanked the Finance Minister, a release says.
Thanking Prime Minister Sheikh Hasina and Finance Minister AHM Mustafa Kamal for their proposal on the reduction of registration and stamp fees in housing sector in the national budget for the fiscal year of 2019-20, REHAB acting president Liakat Ali Bhuiyan said, “These initiatives will help boost the housing sector across the country.”