Achieving targeted growth difficult, not impossible: ICAB

Implementation of the proposed budget for the next fiscal year is difficult but not impossible, says the Institute of Chartered Accountants of Bangladesh (ICAB).

It says efficiency, transparency, and accountability are essential to implementing the proposed budget.

Addressing a post budget virtual press briefing on Saturday, ICAB President Mahmudul Hasan Khusru said the proposed budget for  FY 2021-22 sets a growth target of 7.2% and an inflation target of 5.3%. Achieving such high growth requires coordinated development in all areas of the economy, which is difficult but not impossible.

Khusru said, in the last financial year, a 6.2% GDP growth rate was achieved which indicates the country's capability of achieving a high growth rate. The proposed budget is ambitious and to implement such an ambitious budget, efficiency, transparency, and accountability are essential.

Observing that extensive economic activity is needed to mitigate the effects of the ongoing pandemic on the country's economy, he said, "More and more investment in different sectors is needed to create new jobs. But the reality is, as long as the Covid-19 pandemic exists in the country, there will be no significant investment and no new employment."

"Therefore, according to the government's plan to revive the economy, 80% of the population must be vaccinated at any cost. Eradicating Covid-19 is the number one challenge to implement the proposed budget," he added.

"There is a need to increase allocation in the social security sector considering that a large number of people in the country have fallen below the poverty line due to lockdowns imposed to stem the spread of coronavirus. The closure of economic and business activity for a long time ultimately resulted in large scale job cuts in various sectors.

"The proposal to reduce the tax rate for listed companies, from 25% to 22.50%, and non-listed companies, from 32.50% to 30%, is praiseworthy. However, increasing the tax rate on mobile financial services (MFS) in the proposed budget will severely affect low income people who are the main subscribers of MFS services. Higher taxes on MFS services will hinder the poor.

"The proposed tax breaks for cloud services, system integration, e-learning platforms, e-book publishing, mobile application development services, and IT freelancers until 2024, will have a positive impact.

"In order to establish the Made in Bangladesh brand, automobile companies manufacturing three-wheelers and four-wheelers have been offered conditional tax exemptions for 10 to 20 years.

ICAB applauded the proposal to make it mandatory for companies to submit annual financial statements for VAT audit, and inclusion of the use of the Document Verification System (DVS).

ICAB welcomed the proposal to include chartered accountants as authorised representatives and customs consultants in the Customs Act.

ICAB member Md Humayun Kabir moderated the virtual press briefing.