The government has not announced any new incentive for local industry development in the proposed budget for the fiscal year (FY) 2023-24, but imposed additional VAT on some local manufacturers like smartphone manufacturers, software development and customisation.
Foreign Investors’ Chamber of Commerce and Industry (FICCI) came up with the observation in an instant reaction Thursday night after Finance Minister AHM Mustafa Kamal unveiled the national budget of over Tk 7.61 lakh crore for FY24.
A press release was issued on Friday (June 2) in this regard.
According to the release, the chamber’s proposal for integrated IT strategy, introduction of e-invoicing in line with other developed markets for ensuring transparency in revenue collection has not been considered.
“Our concern on customs duty valuation process in line with the Customs Valuation Rules, 2000 has not been addressed in the proposed budget as well,” it added.
FICCI acknowledges challenging budget targeting higher growth. “We would like to express our sincere gratitude to the prime minister and finance minister for presenting the national budget for FY2023-24 at this difficult time.”
The proposed budget set the target for a GDP growth of 7.5 per cent and an inflation rate of 6 per cent in the upcoming fiscal year. “FICCI believes that the proposed targets are challenging. 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.
The chamber has also appreciated an increase in allocation for the power and energy sector. But allocation for the health, agriculture, and educational sectors does not seem to be adequate, it says.
“We feel that the government should concentrate on enhancing the quality of spending which could bring further efficiency as well as generate employment.”
It also expressed concern about bridging the deficit from banking sources which may further tighten the liquidity situation.
“We welcome an increase of initial tax-free income threshold by Tk 25,000 to Tk 50,000 for different classes of assesses. But considering the trend of high inflation, this may not be adequate.”
The introduction of environment surcharge for owning multiple motor cars is a good initiative for protecting the environment. However, corporate should be excluded as they would need multiple vehicles for its operation.
FICCI 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, the chamber cannot comment on the details as it has not been made available in Thursday’s budget session.
BDST: 1132 HRS, JUN 01, 2023