Bangladesh: Proposed National Budget will help achieve targets of SME development, poverty reduction
Dhaka Chamber of Commerce and Industry (DCCI), at a meeting under the chairmanship of its President M. A Momen held in the DCCI Auditorium on yesterday to review the Proposed National Budget, 2006-2007 welcomed the budget as a positive one to achieve the targets of SME development and poverty reduction as enshrined in the PRSP. It also pointed out the positive and negative elements of the budget.
DCCI appreciated inclusion of a number of its recommendations in the proposed Budget and called for their implementation in right earnest to boost the private sector investment, diversification of export and broadening of the industrial base of the country.
DCCI praised highest allocation for human resource development with emphasis on education and ICT; Continuation of tax exemption and rebate for agro-processlng, jute and textile industries up to June 30, 2008; Emphasis for development of SMEs; Increase of subsidies to Tk 1200 crore, R&D of Tk 244 crore, and loan of Tk. 6,000 crore for agriculture sector; Increase of total allocation for local government, infrastructure and rural development to Tk. 6,427 crore: Increase in the allocation for energy and power with emphasis renewable energy sector; Reduction of duties on basic and Intermediate products to develop local industries.
It praised reduction of duties and supplementary duties on some Important essential commodities to decrease inflation; Imposition of specific duties on sugar to reduce tax burden to promote food industry and reduce sugar price; Office of Tax Ombudsman to be operational from July, 2006; Opening of two separate Custom Houses at port, one for import and the other for export, for facilitation of International trade and clearance of goods; Reduction of Income tax to 15 per cent for Diamond cutting and polishing industry; Exemption of IDSC on import of hybrid seed; Exemption of duties and taxes and withdrawal of AIT for import of capital machinery; Reduction of duties for raw materials and intermediate products of emerging plastic, melamine and electronics industries and extension of protection for them; Protection of local paper and printing industry by imposition of 15 per cent SD on import of printing materials; and reduction of time-limit for disposal of appeal cases and reduction of fines relating to VAT payment.
DCCI pointed out the following 'negative elements': Provision of Revenue Receipt of Tk 52542 crore, a 17 per cent increase over the revised budget, 2005-06, will be hard on the tax-payers; Imposition of Tk. 5000 or 0.5 per cent income tax on all companies irrespective of profit and loss; Allocation of fund for SMEs development is insufficient and no allocation made for the SME Foundation; No specific allocation for backward linkage industries and for diversification of high value added RMG; 5 per cent AIT has been imposed on cash incentives; List of eligible sector s for tax exemption does not include all thrust sectors and SME booster sectors; No clear allocation and direction for private sector investment in power sector; Exclusion of most of the 33 thrust sectors of Industrial Policy 2005 and 11 booster sectors of SME Policy from necessary incentives I budget allocation, Increase in minimum income tax of 25 per cent from 15 per cent for self assessment will discourage extension of tax-net; Insufficient allocation and non-extension of coverage of EEF; No thrust for capital market development and privatization; and no specific measure to facilitate Improvement of standard and quality of local products to be acceptable and competitive In export market.
Source: Independent (Internet Edition)
