Next budget will make businesses happy: Finance minister

Finance Minister AHM Mustafa Kamal has assured the country's business community, saying the budget for the 2023-24 fiscal year (FY24) will reflect the demands and proposals of businessmen to the greatest extent.

"Do not worry, the next budget will not hurt you. The budget document will be prepared in line with your demands," he said while addressing the 43rd consultation meeting of the National Board of Revenue (NBR) and the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) at a Dhaka hotel on Thursday.

At the pre-budget meeting, the country's top business leaders presented a set of demands, including a simple and modern tax system in order to make the next budget business and investment friendly, as well as tax cuts in some sectors.

In addition, the businessmen also raised allegations of harassment by taxmen at the field level.

In response, the finance minister said, "I have heard all your suffering. I know that doing business is difficult. The NBR chairman [who was present in the meeting] is also aware of these issues. You [businessmen] do not need to worry."

Addressing the concerns of businessmen, NBR Chairman Abu Hena Md Rahmatul Muneem said, "I hope we will be able to present a budget that will please you."

The NBR chairman also reminded the businessmen that the government needs to collect more revenue and remove import barriers as much as possible.

Signalling a withdrawal of existing tax support (tax break or reduced tax rate) given to some sectors, Abu Hena said, "The support will be reduced gradually. Local industries that have developed their capacities will now have to bear the burden of the tax. Many have already become able to pay taxes."

NBR Chairman Abu Hena Md Rahmatul Muneem said, "We have to face the challenges that will arise during the transition from the List Developed Country (LDC) status. We have to do it the right way to avoid setbacks. Our industries have to be more competitive."

Stressing the need for adding high value to products, the NBR chairman said, "If we cannot add value to our export products then it will be difficult to survive after importing fuel and raw materials at high prices."

The budget for the next fiscal year will be placed in parliament in early June. 

Meanwhile, the finance ministry and the NBR have been holding meetings with trade bodies for the past two months and the consultative committee meeting was the last such event that sums up the demands and concerns of the private sector before the budget is proposed. 

On behalf of the traders, FBCCI President Md Jashim Uddin put forward several proposals for the next budget.

A total of 38 business leaders from various sectors also addressed the meeting. Some of the demands made by them are as follows:Dhaka Chamber of Commerce and Industry (DCCI) President Md Sameer Sattar proposed reducing the corporate tax rate by 2.5% (250 basis points) and expanding the tax net.

Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), has called for a reduction of source tax on exports from 1% to 0.5% for the next five years, withdrawal of the existing 10% income tax on cash assistance, and duty-free import of firefighting equipment.

Bangladesh Textile Mill Association (BTMA) President Mohammad Ali Khokon proposed to withdraw duty on man-made fibre import and to withdraw VAT on raw materials of recycled fibre and finished goods.

Bangladesh Jute Mills Association proposed not to collect tax at source from jute farmers and to reduce advance income tax (ATI) from 1% to 0.5%.

Stop harassment, consult us before issuing SROs: FBCCI

At the meeting, the FBCCI asked the NBR to sit and discuss with the trade body before forming any Statutory Regulatory Orders (SROs).

An SRO is a subordinate legislation, which is a collective term for statutory rules, regulations, ordinances, by-laws, and notifications, issued by government bodies.

FBCCI President Md Jashim Uddin said, "The NBR introduces many SROs on their own accord without consulting traders. Later, some complexities arise during implementation at the field level."

"Before issuing any SRO, sit with us and talk. Accepting our every suggestion is not necessary but there is no harm in talking," he said.

The FBCCI president also said customs officials make arbitrary assessments on the valuation of imported goods, which eventually increases the prices of goods. There is a task force consisting of the FBCCI and NBR members, but it is ineffective.

At the meeting, several business leaders complained of harassment by taxmen at the field level. Obaidur Rahman, former FBCCI director, said, "The field-level taxmen are harassing small businessmen. They are intimidating traders and seizing documents from businesses."

"On the day of the Bangabazar fire, some taxmen took documents from my office. Later when I contacted the VAT commissioner, actions were taken against those officers. I was able to do it but many would not be able to do so," he said.

Traders want black money in real estate 

At present, the maximum customs duty on goods imported into the country is 25%, apart from supplementary duty and regulatory duty. The FBCCI has proposed to reduce customs duty to 15% by 2030.

In addition, the trade association proposed to cut advance income tax (AIT) at the import stage to 3% from 5% and increase the tax-free income limit for individuals from existing Tk3 lakh to Tk5 lakh.

The FBCCI said investing untaxed money in the real estate sector should not be questioned under the income tax law.

The apex trade body suggested that if this facility was given for five to 10 years, it could help prevent money laundering from the country and boost revenue.