Social security needs more allocation in budget: ICMAB
It said reducing the tax rate of one-person companies is quite logical
More social security allocation is needed in the proposed budget for the fiscal year 2021-22 to eradicate poverty, says the Institute of Cost and Management Accountants of Bangladesh (ICMAB).
On Sunday evening, it held a programme to express its reaction to the proposed budget. The event was moderated by ICMAB Vice-President Md Mamunur Rashid while its President Abu Bakar Siddique presided over.
A paper on the national budget for 2021-22 was presented by Md Shafiqul Alam, principal and CEO of Shafiqul Alam and Co Chartered Accountants.
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The ICMAB said most of the businesses had remained closed due to the lockdown amid the Covid-19 pandemic, causing a large number of people to go under the poverty line. But the allocation for social security in the proposed budget is very low and that is why more allocation is needed.
It said as Covid-19 lingers, there will neither be significant investment nor employment generation. To revive the economy in the post-pandemic era, 80% of the total population have to be vaccinated at any cost.
The institute thinks if the cost of goods sold statement is audited by the cost and management accountants, cost efficiency will increase and expenses will reduce. This will have a significant impact on the overall economy.
The one-person company tax rate was reduced to 25% in the proposed budget and the ICMAB thinks it is quite logical.
The tax rate for unlisted companies in the share market was reduced to 22.5% from 25%, and that for non-listed companies to 30% from 32.5%. The ICMAB said this is quite praiseworthy.
But source tax was increased from 5% to 7% on the delivery side, which the institute thinks will ultimately increase the tax rate from the previous year. It said for business-friendly tax implementation, justification is very much required on this side.
Mobile financial services tax rate was increased but the majority of customers of these companies are low-income people. The ICMAB thinks this tax burden will be a barrier to the financial inclusion of the poor, which will negatively impact the overall digitisation.
In the proposed budget, tax waiver until 2024 was offered for e-learning, cloud services, system integrations, mobile application development services, e-book publications, and IT freelancing. As a result, digital services will be cheap and will easily reach all classes, including the poor, the ICMAB said.
The ICMAB welcomed the announcement to make health services available in cities outside Dhaka by establishing hospitals. 250-bed general hospitals and 200-bed specialised hospitals in those areas will get a 10-year tax rebate under certain conditions.
