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Business community terms budget 'pro-business'

  • Published at 11:14 pm June 11th, 2020
Export earnings from leather industry continue to fall
Syed Zakir Hossain/Dhaka Tribune

The export oriented industry people thanked the government for waiving taxes

The country's business community on Thursday deemed the national budget for 2020-21 fiscal year "pro-business" as the government proposed to waive taxes amid constraint of funds to meet extra expenses to fight Covid-19 pandemic.

The Finance Minister placed proposed budget of Tk568,000 crore for FY21 in the parliament on the day. 

In the proposed budget, the government cut 2.5% corporate tax for non-listed companies, while keeping corporate tax unchanged at 12% for the RMG sector. Individual income tax limit was increased to Tk3 lakh from existing Tk2.5 lakh. 

In addition, import duties were cut on several goods for the export-oriented and local industries, as well as on essential commodities to help local businesses to grow.  

"The country is now in deep crisis due to the Covid-19 pandemic, which hit the economic activities badly, which left the government in extra pressure to ensure treatment and provide cash support to the poor," said former DCCI president Abul Kasem Khan.

Amid fund constraints, the government proposed some incentives with the existing one and reduced corporate tax, advance income, imports duty, and also increased tax free income limit. So, the budget is pro-business and it will help to fight the Covid fallout, said the business leader.  

Meanwhile, the export oriented industry people thanked the government for waiving taxes.

“As for the 0.25% source tax being raised to 0.50, we humbly appeal to the government for reverting to the earlier 0.25%,” said BGMEA president Rubana Huq. 

However, the apparel makers platform thanked the government for continuation of 1% extra incentive, reduction in yarn tax, VAT waiver for personal protective equipment (PPE) and mask production, zero duty on cotton import and for the VAT rebate on import of RFID tags, industrial rake and cutting table.

Dhaka Chamber of Commerce and Industry (DCCI) president Shams Mahmud in his initial budget reaction termed the budget a "progressive and high growth-targeted one, which is appreciable." 

DCCI also appreciates initiative of increasing investment and employment. The budget is an inclusive one despite it is a huge expenditure budget which aims to increase investment, stimulus to the entrepreneurs, ensure social safety net, said Shams.

"But to implement this huge budget is a big challenge, therefore, we need to re-consider revenue collection target," he added.        

Shams Mahmud urged the government to form an advisory committee for financial sector under the Bangladesh Bank who will guide the financial sector amid the Covid-19 pandemic. 

He urged for better private sector credit flow and easy access of loan under stimulus.

Shakil Rizvi, a former president of Dhaka Stock Exchange Brokers’ Association (DBA) said these measures will increase transactions of bonds in the capital market and facilitate the flourishing of a strong bond market in the country, Corporate tax has been slashed to 2.5% for non-listed companies in the private sector. But they suggested to cut corporate tax a bit so that entrepreneurs may sustain in post-Covid situation, beside reduce the tax for listed companies.