From pundits to commoners and rich to poor, the major talking points since last week was the proposed national budget for 2021-22 financial year. Despite all the analysis and arguments, from where I see, one thing is undeniable that this budget pampers the vision of Made in Bangladesh products.
With the current phase of our economy, it is impossible for anyone to present a budget that would make everyone happy. But, in the long run, the policy of Made in Bangladesh should be the only possible way to reach a comprehensive budget for all.
From different measures in the coming budget, like reduced corporate tax to tax holiday in new potential manufacturing sectors, it seems the government is set to tap the local potential. The Made in Bangladesh vision will come to success in continuation of such policies.
The Finance Minister AHM Mustafa Kamal has considered the proposal of the business community to reduce corporate tax in the budget for 2021-22 financial year. With the exception of mobile financial services, the proposed budget reduced or keep the corporate tax same in most of the sector.
The sole proprietorship businesses will have to pay 25 percent corporate tax from next fiscal which is currently 32.5 percent. For the listed companies the corporate tax was proposed to decline to 22.5 percent from 25 percent and non-listed companies 30 percent from current 32.5 percent.
I wholeheartedly support such move, except the mobile financial services issue, as these will strengthen the economic base of the country. The mobile financial service has played a tremendous role to enhance financial inclusion and the ease the citizens’ life by providing digital service even in the rural areas of the country. And graduating the country to the next level this type of payment module also needs to be digitize along with boosting the industrialization process. So the mobile financial service also required to get some boost in terms of taxation point of view.
Empowering the local industry seems to be the priority of the proposed budget which will have profound impact on the private sector. By facilitating new enterprise with reduced tax the government will be able to create more jobs and raise the economic scale of the people.
An argument, however, can't be ignored that with reduced tax the government might lose its revenue. I beg to differ. I believe with reduced tax it will open up a whole new opportunity for new businesses which will eventually bring more revenue for the government. The target for achieving 7.2 percent growth will be possible in such policies.
Among other business friendly proposal was reduced the advance value added tax. Another appreciating move was not to allow undisclosed money legalization. It is immoral to provide such facility and discourage honest taxpayers.
One major aspect of the proposed budget was providing 20 years’ tax holiday for local automobile industry and 10 years for home appliances and agricultural light engineering. Such policies boost local manufacturing manifold. Already we have developed some local brands and with such policy support our brands will rule the world market someday.
Finally, I would like to request the government to put more focus on information technology and education, specially technical education, also so that we can move forward with a holistic approach of development.
Writer: Niaz Morshed Elite, President, Junior Chamber International (JCI) Bangladesh
BDST: 1512 HRS, JUN 8, 2021