'The NBR revenue collection target is Tk330,000 crore, which is 9.82% higher than the previous fiscal year'
In their initial reaction to the proposed budget for the 2020-21 fiscal year, the Dhaka Chamber of Commerce & Industry (DCCI) on Thursday urged to reconsider the revenue collection target as the budget would be difficult to implement.
DCCI President Shams Mahmud said: “It will be a big challenge to implement this huge budget since it is a huge expenditure budget which aims to increase investment, provide stimulus to entrepreneurs and ensure a social safety net. It needs to reconsider the revenue collection target.
“The NBR revenue collection target is Tk330,000 crore, which is 9.82% higher than the previous fiscal year. To attain this high target, NBR needs to widen its tax net, pending tax collection, and strengthen manpower at the upazila level for more tax collection. The tax burden should not be imposed on existing taxpayers,” he added.
Describing the budget as “post-Covid-19 economic recovery-focused,” the DCCI president said he appreciated the focus on attaining 8.2% GDP growth and keeping inflation to 5.4%, as well as the initiatives to increase investment and employment.
He recommended a higher allocation for the health sector under their annual development program (ADP) considering the Covid-19 situation.
“Skill development and infrastructure are much needed in the health sector to combat pandemics like the Covid-19 outbreak. Sufficient allocation is necessary to combat any pandemic in the future,” the DCCI president said.
He proposed that health insurance be started and private hospitals are brought under proper monitoring.
“Although subsidies in the agriculture sector have been increased to Tk9,500 crore, and Tk5,000 crore has been allocated for Agriculture re-financing schemes to boost the agriculture sector, more storage capacity is needed,” Shams Mahmud further said.
He also suggested cuts to corporate tax to help entrepreneurs cope with the post-Covid-19 situation.
The DCCI president welcomed the stimulus for industries in the proposed budget but requested waivers on advance income tax and advance tax for the RMG, leather, jute and jute goods, and agro-processing sectors.
Citing a lower number of export orders and order cancellations, he said the increase in source tax on RMG exports from 0.25% to 0.5% would be challenging. He requested to consider reducing the source tax on RMG exports and welcomed the 1% cash incentive on RMG exports.
The DCCI president welcomed the Tk20,000 crore stimulus for the micro, small and medium enterprise (MSME) sector, saying it should allow MSMEs easy access to loans. However, he requested a 1% source tax instead of 2% on local LCs used for importing essential commodities.
Shams Mahmud further urged to form a high power advisory committee for the financial sector under Bangladesh Bank, who would guide the financial sector amid the coronavirus pandemic. He also urged for better private sector credit flow and easy access to loans under the stimulus packages.
He praised the decision to allocate Tk95,574 crore for social safety net programs.
“Poverty has increased due to coronavirus pandemic. The poor and ultra-poor community should come under social safety net programs. Sustaining existing employment is more challenging than creating new employment at this moment. The budget should have an allocation for up-skilling and re-skilling the young generation,” the DCCI president added.