Enhancing private sector investment, employment generation, revenue shortfall and financing are some of the challenges of the proposed budget for FY2022-23, reports UNB.
In order to attain the targeted GDP, government needs to focus on widening tax net gradually, automation of tax structure, fixing up rational target of revenue collection and consistency of government expenditure.
President of Dhaka Chamber of Commerce and Industry (DCCI) Rizwan Rahman said these in his initial reaction on proposed budget for FY2022-23 on 09 June 2022 at the DCCI Building.
The inconsistency between income and expenditure in the proposed budget may lead to dependency over bank borrowing or loan from foreign source.
Dhaka Chamber thinks that a planned, timely, cost efficient and implementable budget is more effective than a big budget.
Since the middle and lower middle income group of the society are facing the pressure of inflation, taking it into consideration, the limit of individual income tax can be increased. However, few slabs can be created for the higher income level group but obviously in a rational manner.
Listed companies offloading more than 10 per cent of their paid-up capital to the market through IPO only can avail the opportunity of giving 20 per cent corporate tax.
And both listed and non-listed companies who have cash expenditure or investment of Tk 1.2 million annually and if they do transactions through banking channel are eligible to give 20 per cent corporate tax.
If any listed company fails to comply with these two conditions, they will have to pay 25 per cent corporate tax. Dhaka Chamber feels that the threshold or limits in these conditions are very insignificant.
Moreover, corporate tax rate should be reduced to be more competitive not only in the international market but also in local market. This year from July to May our export earning was USD 47.17 billion against import expenditure of USD 68.87 billion.
Trade deficit is USD 21.7 billion. It seems that our import expenditure is higher than the export earnings. Import expenditure over export earning is not good for our international trade.
"We need to promote export diversification. Equal corporate tax for RMG and non-RMG export sector will facilitate diversification process. 24.9 per cent investment from the private sector is targeted. But for that, private sector credit flow should be increased."
ADP implementation till May 2022 was 58.36 per cent which is not satisfactory. Mega infrastructure projects should be completed at a faster pace but in a lower price ensuring transparency and accountability.
Clause number 83, 84 and 100 of goods seize provision need to be reformed, Rizwan Rahman said.