The Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) has urged the government to limit its borrowing from banks within the target set in the fiscal year 2015-16 budget and to continue efforts to explore alternative financing sources, including Public Private Partnership (PPP).
The chamber made the call yesterday in a statement and said attaining the increased revenue target would be a major challenge as the government could not achieve the revenue target set for the outgoing fiscal year.
Finance Minister AMA Muhith on Thursday presented a Tk295,100 crore budget, which is 23.1% higher than the revised budget of the outgoing fiscal year.
It suggested bringing all economic sectors under the tax net, adding that the state of specific sectors and their ability to pay should also be taken into account.
It urged the government to reconsider the increase in tax at source to 1% from 0.3% until the industries are on a stronger footing as clothing and other export sectors are currently facing many challenges, including the Eurozone crisis.
“For the sake of export diversification, export-oriented sectors other than the readymade garment should be provided with at least the same, if not better, incentives for growth.”
The government has set a 7% growth target in the budget but it should be higher in order to achieve the status of a middle-income country by 2021, said the chamber. “This cannot be achieved without higher private sector investment which needs to be encouraged by providing specific fiscal measures.”
Urging the government to take steps for diversifying fuel usage for power generation and to improve energy security, the MCCI said exploration of gas must be prioritised as many industries are currently unable to operate due to the lack of gas.
The MCCI welcomed the proposal to reduce corporate tax rates in some instances.
