Finance minister expresses high optimism over budget implementation
Parliament on Monday passed the Finance Bill 2020, reducing the lock-in period to one year from the proposed three years for investing undisclosed money in the share market.
On June 11, Finance Minister AHM Mustafa Kamal tabled a national budget of Tk568,000 crore in parliament for the 2020-21 financial year.
The proposed budget allowed investment of money from undisclosed sources in the stock market on condition that the investment be made with a 10% tax and be put under a three-year lock-in period.
Following the presentation of the draft budget, stakeholders of the capital market have demanded the withdrawal of the lock-in mechanism on investing undisclosed money in the market.
Earlier, the DSE (Dhaka Stock Exchange) Brokerage Association (DBA) and the Bangladesh Merchant Bankers Association (BMBA) in separate letters to the finance minister urged a withdrawal of the lock-in period condition from the finance bill.
Both the associations had argued that the proposed opportunity to invest undisclosed money in the capital market by paying a 10% tax with a lock-in period of three years was not feasible.
Shakil Rizvi, director and former president of Dhaka Stock Exchange (DSE), told Dhaka Tribune that the change was a bit better than the proposed three-year lock-in period provision.
In the FY 2011-12 budget, there was also a similar 10% tax provision for investing undisclosed money in the stock market. That initiative required a lock-in period of two years.
Stock market analyst and chief executive officer (CEO) of AFC Capital Limited Mahbub H Mazumdar said, "We are thankful to the government for the change in the Bill. As the capital market is a productive sector, we were expecting the withdrawal of the time bar, and a 5% tax, instead of the proposed 10%.”
The proposed tax on zero coupon bond has also been scrapped and made the tax zero.
The Bill also extended declaration of black money investment from June 30 to November 30. The proposed Finance Bill gave an opportunity to declare invested black money up to June 30, this year.
Considering the concerns from different quarters, the time limit has been extended by five more months to November 30, a senior revenue official has told Dhaka Tribune.
The Finance Bill also waived three wheelers from paying a 15 percent supplementary duty on BRTA fees and charges.
It also made mandatory depositing 20 percent of a disputed VAT amount which was imposed by any VAT official while filing any appeal. But no deposit is required for going to Customs, Excise and VAT Appellate Tribunal.
Previously it was 10 percent for filing appeal while another ten percent for going Tribunal.
The finance minister moved the bill in the House.
Kamal in his winding-up speech expressed high optimism to implement the budget in this adverse situation.
"Asian Development Bank projected our GDP growth as 7.5 percent which is closer to our projection of 8.2 percent, Inshallah we will be able to implement the budget," he said.
He said that people of the country got the highest priority during this pandemic as the government wanted to save people and revive the affected economy.
He mentioned that the Prime Minister already announced 19 stimulus packages which were under implementation level.
The Minister said that in this budget the government gave the highest importance to the health sector and allotted Tk 29,247 crore. Besides, to face the Covid-19 pandemic additional Tk 10,000 has been proposed.
"Our root is our agriculture, our rural economy, for that we have given extra importance to agriculture sector where 40 percent of our employment is generated," he said.
He believed that this agricultural sector would be the unique area of country's advancement.
The finance minister said the people of different sectors are now facing a critical time due to the stagnant economic situation in the country and this budget is for all.
"I can’t exclude anyone from this budget, if I could left anyone then the size of the budget could have been small with the budget deficit, but the truth is very much tough, and we have loved the truth knowing everything," he said.
"We have to go long way, we have to walk far, but this path is not smooth, we can do that if we get help from all," he said.
Later, the bill was passed by voice vote.
The bill was introduced in the House on June 11 where Finance Minister AHM Mustafa Kamal set an ambitious 8.2 percent GDP for the next fiscal stepping up on a comprehensive plan includes four main strategies although he himself admitted that all calculations about the global economy have been turned upside down under the impact of the Covid-19 global pandemic.