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Finance Minister AHM Mustafa Kamal unveiled a Tk523,190 crore proposed budget for FY2019-20 in the parliament on Thursday. Although there are various challenges to implementing VAT and revenue collection, the proposed budget for the 2019-20 fiscal year is business-friendly, business people have said.
Welcoming the proposed budget, Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) President Sheikh Fazle Fahim said: “This is continuation of the sixth and the seventh five-year plans.”
About the new VAT law, Fahim said it will bring comfort to small businessmen, and urged the government to give extra concentration to it so that no complexity arises during its implementation.
Finance Minister AHM Mustafa Kamal unveiled a Tk523,190 crore proposed budget for FY2019-20 in the parliament on Thursday.
The budget speech, however, did not clarify the specific VAT rates in different sectors, the FBCCI president said.
“Therefore, the percentage of VAT imposed on an industry or a product remains unclear,” he added.
When contacted, Metropolitan Chamber of Commerce and Industry (MCCI) Vice-President Golam Mainuddin told Dhaka tribune that the government in its proposed budget has taken different initiatives, such as one-stop service, ease of doing business and setting up new EPZs, to encourage investment and exports.
“We will get the benefits if these initiatives are implemented on time and effectively,” he added.
Mainuddin also thanked the finance minister for giving proper focus on education and training, infrastructure development, and planned urbanization of villages as per the election manifesto of the Awami League-led government.
He said the MCCI believes that the country’s economy is progressing well, but is below its true potential.
Inadequate infrastructure, shortage of power and energy, and bureaucratic bottlenecks are still major impediments to the growth of the economy.
Also, shortfall in revenue collection and weak ADP implementation are major worries for the economy, Mainuddin added.
MCCI also feels that attaining the increased NBR tax revenue target of Tk325,600 crore, which is 6.29% higher than the revised budget (Tk280,000 crore) of the outgoing fiscal, will be a major challenge.
“This will put excessive pressure on existing taxpayers,” he mentioned.
A higher allocation in ADP (Annual Development Programme) is needed to fulfill development goals, he said, adding that the MCCI would urge the government to take necessary measures to ensure efficient and effective spending of the ADP funds.
MCCI is pleased to note that the human resources sector _ education, health and family welfare _ has been given the highest priority in the upcoming ADP with an allocation of 27.40%, he said.
In a post-budget reaction, Foreign Investors’ Chamber of Commerce and Industry (FICCI), said well-structured and transparent companies will require sufficient time to accommodate the provision of new VAT and SD Act, 2012 and Rules, 2016 in their business process.
The chamber had proposed reduction in corporate tax rate to increase investment, but it was not considered in the proposed budget, it said.
This was the first national budget presented by Mustafa Kamal, who took charge of the finance ministry after the Awami League returned to power for a third time through the 11th general election, held on December 30 last year.
source (DT)
