The Dhaka Chamber of Commerce and Industry (DCCI) welcomed Saturday the proposed budget for the fiscal year (FY) 2014-15 as it has proposed to extend tax holiday facility for under-developed areas to 10 years from seven years.
"The proposed budget allows donation or contribution to government fund for natural calamities or disasters to be treated as activities of corporate social responsibility (CSR). The DCCI hails this initiative," the DCCI said in a statement in its budget reaction on the day.
The trade body appreciated the proposal to reduce advance income tax on profit from readymade garment (RMG) and other export-oriented sectors.
"In this proposed budget, advance income tax on profit from readymade garment (RMG) export has been reduced to 0.3 per cent from 0.8 per cent and advance income tax on profit from other exports has been reduced to 0.6 per cent from 0.8 per cent. The DCCI appreciates these proposals as it will boost our export sector," it added.
The proposed budget has recommended tax exemption on interest income from investment on pensioner savings certificates and wage earners' bonds.
"The DCCI welcomes this initiative. Income tax rate for non-publicly traded company has been reduced to 35 per cent from 37.5 per cent which the DCCI sees as a positive effort," the statement added. It also pleaded for reducing all other corporate taxes.
To meet the deficit, the proposed budget aims to borrow Tk 312.21 billion from local banks. The DCCI said it may curtail the credit flow to the private sector.
The DCCI said the outlay of the Annual Development Programme (ADP) in the 2014-15 budget has been fixed at Tk 803.15 billion which was Tk 600 billion in the revised budget of the last fiscal year. It urged the government to implement the ADP.
The DCCI also welcomed the government's commitment to development of infrastructure like building Padma Bridge, setting up of a tunnel under Karnaphuli river in Chittagong, elevating important highways into four-lanes, establishment of deep seaport and liquefied natural gas (LNG) terminal.
"The DCCI is of the opinion that these commitments will encourage the private sector," the statement mentioned.
It also hailed the proposed budget that offers tax holiday facility for Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) for the next five years until 2019.
The DCCI said it thinks the allocation of Tk 2.50 billion for development of human resource will have a positive effect on the country's economy.
Tax-free income limit for individuals remained unchanged in this year's budget proposal. But the DCCI has recommended increase in tax-free income limit for individuals up to 0.3 million considering the present socio-economic condition.
The DCCI also recommended that source tax on interest from the FDR of trade bodies should be considered and declared as final liability.
It also observed some changes in the truncated base value system in the proposed budget which may affect the purchasing capacity of small and medium enterprise (SME) entrepreneurs as well as general consumers.
"The government should widen the tax net to increase the revenue collection up to 17 per cent in the next five years. The DCCI feels that it will increase the tax-GDP ratio," the statement said.
The DCCI said if 7.3 per cent growth target of gross domestic product (GDP) is achieved, it will help the country's economy.
"This year, the GDP growth has been targeted at 7.3 per cent. The DCCI thinks that if it can be achieved, economic advancement will get a momentum. Proposed budget gives importance to development of SMEs which DCCI thinks will surely boost the country's GDP," the statement said.
