Businessmen and economists are still in the dark about the new Income Tax Act 2023, which will be presented in parliament on June 4.
Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Research Institute (PRI) urged the government to disclose NBR's new Income Tax Act and to give them sufficient time and opportunity to review and comment on it before its effect.
Economists and business were speaking at a post-budget reaction jointly organized by MCCI and PRI on Saturday.
Agreeing with the proposal as a chief guest of the discussion Planning Minister MA Mannan said: “I agree that there is a need for communication and consultation with the business community before the passing of the new Income Tax Act, 2023.”
He also assured that he will convey this message to relevant people in the government.
Regarding subsidy, he said: “But in many cases, the government will come out of the subsidy. Getting out of the subsidy is a very good thing for our economy.”
“Our economy is sustained by agriculture, industry and remittance or expatriate income. So the government will give subsidies to the agriculture sector in the budget,” he added.
He supported the idea of the appointment of tax collecting agents, as it would create employment, but it had to be done in a gradual and systemized manner.
“If the government can manage the VAT process properly then there is a lot of potential in this sector. I will ask the government to do this properly because VAT is a good tax.”
Although economists, businesses and discussants have advised the government to give more emphasis to direct Tax collection not indirect Tax like VAT.
Sadiq Ahmed, vice-chairman of the Policy Research Institute of Bangladesh (PRI) and former senior official of the World Bank said: “There are four major challenges of this budget. restoring macroeconomic stability; the challenge of revenue mobilization; prudent financing of the budget deficit; and protecting social sector spending.”
Regarding inflation he said: “Countries around the world that have raised interest rates have succeeded in reducing inflation. However, inflation in Bangladesh was 9.5% in August 2022, which stood at 9.24% in May this year.”
Sadiq Informed, in June 2022, Thailand's price inflation was 7.7%. It came down to 2.7% in April this year. That is, during this period, Thailand has been able to reduce inflation by 65%.
Similarly, US inflation has come down to 4.9% in April 2023, which was 9.1% in June of the previous year.
Meanwhile, UK inflation stood at 7% in April 2023. In October 2022, the amount was 10.6%. In other words, the country's inflation has decreased by 34% during this period. So why are we not unable to reduce ours?
He also said by imposing restrictions on imports, the amount of imports in the country has been reduced to some extent. This reduced the pressure on the dollar.
Although the current account balance improved somewhat, the capital account could not be increased because foreign direct investment has not increased. Therefore import control is not a permanent solution.
Other topics that came up during the panel discussion were the need for a reduction in Advance Income Tax (AIT), the multi-layered tax on company dividends, revenue mobilization, the low tax-GDP ratio, the lack of confidence between taxpayers and tax collectors, the doubling of property transfer tax, and the requirement for all TIN holders to pay Tk2,000 tax to avail 44 types of government services despite not having taxable incomes.
MCCI Senior Vice-President Kamran T Rahman made the welcome remarks.
Zaidi Sattar, chairman, PRI, set the tone by discussing the national budget with respect to the world economy.
This followed a panel discussion moderated by Habibullah N Karim, vice-president of MCCI.
During this part of the event, Adeeb H Khan, FCA, member of the board of Directors, MCCI, discussed how the industries viewed the budget.
This was followed by an open discussion session.