The Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) on Saturday suggested ensuring energy supply through optimal use of the allocation in the power and energy sector to keep industrial production running.
The country's apex trade body also called for increased coal-based power plants and renewable energy to ensure uninterrupted energy supply to factories.
FBCCI President Md Jashim Uddin suggested cutting allocation for the transport and communication sector to increase allocation for electricity and fuel, if needed, to keep energy supply running.
At the same time, he also suggested withdrawal of VAT on raw materials with emphasis on renewable energy.
The FBCCI chief said industrial production should be kept active to ensure government revenue collection.
The observations and suggestions came at a post-budget press meet hosted by the FBCCI on Saturday.
According to the FBCCI, the size of the proposed budget for FY24 is realistic.
In the current scenario, this size of the budget is not unrealistic for implementing the government's commitment by meeting the needs and aspirations of the people, said Jashim.
However, there are challenges like taming inflation, improving balance of payments, stabilizing foreign exchange rates, increasing size of reserves, collection of crude oil and checking prices of essentials.
To meet the challenges, he said, good governance, proper monitoring, increased investment and production, business-friendly revenue management and effective revenue collection are essential.
Jashim, however, expressed concerns about the challenges associated with meeting the revenue target.
“Collecting huge revenue (Tk500,000 crore) is a big challenge for the government.”
The country's macroeconomic indicators and the revenue collection process are already under pressure due to the prevailing difficult situation worldwide.
“In this situation, the shortfall in revenue collection in the first ten months of the current fiscal is about Tk35,000 crore,” mentioned Jashim.
He stressed the importance of capacity building within the revenue board to increase earnings.
Jashim predicted that government borrowing in large volume would bar the flow of private-sector loans.
In such a situation, he requested the government to consider getting financing from foreign sources at the lowest possible interest rate considering the cost of funds instead of taking loans from the banking sector.
Noting that nothing much was seen in the budget for the textile and export sector and SME sector, he recommended withdrawal of all types of taxes, including VAT, from man-made fibre and reduction in source tax on exports from 1% to 0.5% for the development of the textile sector.
On the personal income tax limit, Jashim said considering the cost of living, inflation and the overall economic condition, the income tax limit for the individual category has been increased from the current Tk3 lakh to Tk3.5 lakh.
Citing that advance income tax (AIT) and advance tax (AT) at import level are increasing business costs, Jashim said: “Before the budget, I proposed to abolish AIT and AT, but no reflection is seen in the budget.”
