President of Dhaka Chamber of Commerce & Industry (DCCI) Taskeen Ahmed in his initial budget reaction said the proposed budget is not as much friendlier for businesses and investment expansion as expected by the business community. We have seen few positive steps such as controlling inflation, few tax waivers, automated return system, reducing few advance tax, central bonded warehouse, vat waiver to LNG import. But eventually, he mentioned that it is a mixed budget where businesses will also be in some pressure due to some tax burden. Regarding tax free income limit, he said, that this year the tax free income limit for the individual has remain almost unchanged and the move will create extra tax burden on the taxpayers especially to the middle income group and service holders from the next year.
He said 100 crore taka fund for the youth entrepreneurs is a good move. But those who sell their products online will face extra cost that will discourage the new startups. In one side internet cost has been slashed but on the other side vat on mobile phones will increase which will impede getting required growth in disitisation process.
Duty on import of spare parts for automobile industries is proposed to increase from 10% to 25% for which he expressed his dissatisfaction. It will hamper the local automotive sector, he added. The revenue collection target fixed will be a big challenge for the government especially dependency on indirect tax, he opined. He also said that government’s dependency on local banks to mitigate budget deficit will shrink private sector credit flow.
He also said that the increase of turnover tax from 0.6% to 1% will increase the cost of doing business. He later proposed the government to reduce the cost of borrowing for the businessmen and for the growth, this rate should be between 6% to 7%. He also stressed on quality implementation of ADP and austerity in government expenditure.
