Staff Reporter :
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the country’s apex trade body, criticised the proposed national budget saying it is high-dependent on the bank loans.
At a briefing on Saturday at the FBCCI office in Motijheel, the trade body’s President Mahbubul Alam said, “Government plans in its proposed budget to borrow Tk 1 lakh, 37 thousands and 500 crore from banks. It will make obstacles of getting loans for the investors in private sector.”
The FBCCI President said, “Governments high dependency on bank loans will create advers situations in investments and employments.”
He suggested the government looking for loans from foreign sources in low interests rates.
The apex trade body also has urged the finance minister for raising the tax-free income limit to Tk4.5 lakh saying the inflations and costing of livelihoods has been increased in the country which should be considered.
He said, “Considering the current inflation, we recommend reconsidering the tax-free income limit of Tk 4.5 lakh. We also urge reconsideration of the proposal to abolish Advance Income Tax (AIT) and Advance Tax (AT).”
It also has sought withdrawal of the 1pc import duty in economic zones for FY25 and proposed extending the previous facilities of 0pc import duty for at least five to ten more years.
In the national budget placed on 6 June, the government’s proposed 1pc import duty on capital machinery for all industries in economic zones and high-tech parks for FY 2024-25.
1pc import duty threatens foreign investment in economic zones: Stakeholders
The trade body’s President Mahbubul Alam said, “If the [previous] facilities are not available, it will discourage foreign investment in these special regions and [perhaps] send the wrong message to foreign investors.”
The FBCCI, however, has said that in the current scenario, this size of the proposed national budget for FY2024-25 is realistic and implementable in line with the government’s commitment to meet the needs and aspirations of the people of the country.
The apex trade body also expressed concern about some provisions including the rise of import duty from zero to 1 per cent on all types of capital machinery for industries in economic zones and hi-tech parks for FY25.
FBCCI President Mahbubul Alam said, “Good governance and proper monitoring are essential for effective budget implementation, requiring clear direction, planning and a focus on improving efficiency, transparency, accountability and oversight quality. Strengthening public-private sector partnerships is also crucial.”
“The proposal to reduce tax rates for non-listed capital market companies is expected to encourage private investment. However, we feel that the terms of cash transactions are not business-friendly when it comes to reducing tax rates,” the FBCCI President said.
“We think it is important to keep harmony between the monetary policy and the fiscal policy,” he said.
Mahbubul Alam said, “The economic development trend is impossible to continue without proper investment and industrial development. Consistency in fiscal policy is essential so that investors can trade with confidence.”
“We proposed to reduce the rate of deduction of tax at source on all exports to 0.5 per cent instead of 1 per cent. Since there is no reflection of this in the budget, I request reconsideration of the proposal.”
“Tax officials are rewarded for uncovering tax evasion, resulting in misuse of the law. We proposed to abolish the reward system and provide alternative incentives to reduce the discretionary power of government officials. Since this is not reflected in the budget, I request reconsideration of the matter,” the FBCCI leader said.
“Reforming the NBR and ensuring business-friendly revenue management is vital for achieving targeted revenue collection. Increasing the tax-GDP ratio requires expanding tax coverage and offices to upazilas,” he said.
Mahbubul also said, “Political and environmental factors are adversely affecting our economy. To implement the budget effectively, we must address challenges such as high foreign exchange rates, loan interest rates, inflation, and foreign exchange reserves.”
FBCCI Senior Vice President Md Amin Helaly, DCCI President Ashraf Ahmed, BKMEA Executive President Mohammad Hatem and senior FBCCI leaders were also present at the event.