FICCI acknowledges challenging budget targeting higher growth
DHAKA, June 1, 2023 (BSS) - The Foreign Investors' Chamber of Commerce and Industry (FICCI) expressed its sincere gratitude to the Prime Minister and Finance Minister for presenting the national budget for fiscal year 2023-24 in these difficult times.
In an immediate reaction, it said the proposed budget aimed for a GDP growth of 7.5% and an inflation rate of 6% for the upcoming fiscal year.
"FICCI believes the proposed targets are challenging however, if achieved, it will bring in momentum in the economy. The projected Annual Development Programme (ADP) of Tk. 2,63,000 crore is targeted to continue facilitating quick recovery of the economy despite different external challenges," said a press release.
It said the Chamber appreciates increase in allocation in power & energy sector. However, allocation for the health, agriculture, and educational sectors does not seem to be adequate.
"We feel that Government should concentrate on enhancing the quality of spending, which could bring further efficiency as well as generate employment. It also expresses concern about bridging the deficit from banking sources which may further tighten the liquidity situation," added the release.
The Chamber welcomed increase of initial threshold for tax-free income by Tk 25,000 to Tk 50,000 for different classes of assesses.
However, considering the high inflationary trend, this may not be adequate.
FICCI said Introduction of environment surcharge for owning multiple motor cars is a nice initiative for protecting the environment. However, corporate should be excluded as they would need multiple vehicles for its operation.
The Chamber welcomed the decision to enact a new Income Tax Act 2023 if it includes reformation aligning with vision 2041 of smart Bangladesh.
At this stage Chamber cannot comment on the details as it has not been made available in today's budget session. However, Chamber expects an English version of the Income Tax Act 2023 will be made available simultaneously for review of the foreign investors.
Apart from the above, Chamber has the following concerns, which has not been addressed in the proposed budget 2023:
Application of change in the tax rate/amendments with retrospective effect has not been considered to make it prospective.
In order to enjoy a preferential corporate tax rate of 20% provision of cash transaction limit based on expenditure incurred by a company has not been addressed and floating shares through IPO only has not been amended to include RPO.
Chamber request for rationalizing the definition of input in line with the global best practice has not been addressed.
There is no new incentive for local industry development however, government has imposed additional VAT for some local manufacturer e.g. smartphone manufactures, software development and customization, etc.
Chamber's proposal for integrated IT strategy, introduction of e-invoicing in line with other developed markets for bringing transparency in revenue collection has not been considered.
Chamber's concern on customs duty valuation process in line with the Customs Valuation Rules, 2000 has not been addressed.