The International Business Forum of Bangladesh (IBFB) has demanded the government allocate more money for development in the budget, instead of placing higher allocations for the non-profit sector.
The forum added that the increased allocation for development was necessary for Bangladesh to achieve the dream of becoming a sustainable and developed nation by 2041, while the allocation for the non-profit sector is used for paying allowances to employees and interest on debt, as well as for subsidies.
The demand was made at a press conference on the proposed national budget for FY19 at the IBFB office in Dhaka, on Monday.
“There is no alternative to development and a pragmatic budget to strengthe the economic foundation of a country,” said IBFB President Hafizur Rahman Khan.
The IBFB expressed its satisfaction at the growth trend in the national budget, with that of FY17 and FY18 15.42% and 17.52% higher than that of previous years, respectively.
However, the forum also criticized the allocation of the proposed budget for FY19, where 61.32% was allocated for the non-profit sector and 38.67% for the development sector.
The forum also criticized the yearly budget implementation rate, as the same was only 79.12% in FY17 and 41.77% up to March of FY18.
Comparatively, the budget implementation rate in India and Vietnam was at 100% in FY16, while Uganda managed 90.3% in the same fiscal year and Bangladesh only 80%.
In order to improve the implementation rate of the budget, the IBFB suggested the government create an autonomous organization affiliated with the private sector to monitor budget implementation capacity.
Moreover, the forum praised the proposed budget for the reduced tax rate on a number of raw materials needed for various industries, stating it would help encourage new industries, create jobs and help supply goods to the people at cheaper rates.
It also welcomed the decision to reduce taxes on locally manufactured products like mobile phones and motorcycles, as well as tax cuts in the agriculture, heavy engineering and textile industries.
On the other hand, the IBFB criticized a lack of specific direction in the export source tax on the garments industries, as it is likely to hamper Bangladesh’s main export sector.
IBFB also criticized the ratio of direct to indirect tax in the budget for FY19, and suggested an increase.
Furthermore, the forum said the range of personal duty-free income should be at least Tk3 lakh in order to increase the number of tax payers.
IBFB was also surprised at the reduction of the corporate tax rate for banks, insurance and financial institutions, rather than the daily commodities.
IBFC representatives Muhammad Abdul Mazid, Omar Shafayat Kausar, Humayun Rashid, among others, were present at the conference.