Budget, though challenging, reflects people's aspirations: MCCI

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FE Report
The Metropolitan Chamber of Commerce and Industry (MCCI) has hailed the 2007-08 budget presented to the nation by finance adviser Mirza Azizul Islam on Thursday.
"The budget, though challenging, reflects the needs of the times and the desires of the people of Bangladesh," the MCCI said in a statement Friday.
The MCCI hailed the proposed budget for abolition of the provision for whitening of black money.
The chamber body in its budget reaction welcomed the step to isolate the mammoth burden of the state-owned Bangladesh Petroleum Corporation (BPC).
The MCCI said such burden by the state-owned entity has been affecting the liquidity position of the public sector banks.
In the budget reaction, the MCCI welcomed the measures providing subsidy on diesel and fertiliser inputs to the country's agricultural sector.
It lauded the withdrawal of the development surcharge in the proposed national budget.
"The increase of customs duties from 5.0 per cent to 10 per cent of the minimum slab on industrial raw materials might impact unfavourably on the local industry and needs to be examined in detail." It said.
It said the move towards curtailing discretionary powers of tax and Value Added Tax (VAT) is a step in the right direction.
But, the MCCI said that the government has scope for doing much in the area.
It is, however, disappointed with the stipulation that directors of companies can not make more than four business visits each year.
"In this age of globalisation businessmen will need to undertake trips abroad depending on the exigencies of the businessmen," the MCCI said.
It said the continuation of the existing export incentive structure with a focus on high growth and high value added sectors is praiseworthy.
The chamber said the steps to exempt income generated from zero coupon bonds from income tax is welcomed. It will provide a boost to the now stalled securitisation initiative, it added.
It said such system will provide banks and financial institutions with an alternative and cheaper source of funding.
The Chamber said: "The abolition of provision of all up front and advance tax on the government bonds is commendable, but it should be extended to bonds and securities issued by banks and financial institutions to allow for a vibrant and publicly traded bond market to emerge."
The Chamber said the measures planned to rein in inflation are welcome and the government needs to remain vigilant that the prices of essential commodities remain within the reach of the common people.
It expressed its reservation that the imposition of duties on computers in a country with such low levels of the ICT penetration is undesirable.
It appreciated the extension of time for depositing tax deducted at source from one week to three weeks.
The MCCI welcomed the endowment allocation of Tk 1.0 billion for the small and medium enterprise (SME) foundation as the SMEs are seen as a major employment-generating sector of the economy.
The chamber body would appreciate clarification on the withdrawal of the turnover tax facility on sectors such as soft drinks, insurance companies, restaurants, WASA etc., and the imposition of the VAT on these sectors, as some of these are already under the VAT net.
The MCCI said the country is reeling from severe power shortage, which is holding back growth of the economy.
"Although the measures have been proposed for building power generation capacity within the next three years, much more needs to be done on an emergency basis to resolve this crisis," the MCCI observed.