Bangladesh's apex chamber may not oppose legalizing legitimately earned undeclared money under the new budgetary amnesty but will request the government not to allow the whitening of ill-gotten wealth.
President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Mahbubul Alam Saturday said the chamber body would write to the government urging not to legalise money accrued through criminal activities.
"We'll write to the government so that money earned through criminal activities cannot be legalised by paying of 15-percent taxes," said Mr. Alam in a post-budget press briefing held at the FBCCI's Motijheel office in Dhaka, while presenting the federative trade body's critical view of numerous major targets set in the national budget for the next fiscal year.
The FBCCI chief's reaction came in response to a question relating to the provision of whitening black money with special reference to former Inspector-General of Police Benazir Ahmed.
Also reacting to another sore point on the financial front -- much-talked-about non-performing loan (NPL) buildups in the banking sector -- the business community's leader said they would not favour 'wilful' defaulters.
But, he made it clear, there are some genuine defaulters and the central bank and commercial banks should take care of them.
"Banks do not give attention to the genuine businesses who fell in trouble after doing a good track record of repaying loans for decades," he said to make his case in support of those who defaulted on paying back borrowed money as per schedule.
The president said the FBCCI "has never done any advocacy on behalf of dishonest businessmen."
Mr. Alam, who runs a corporate house, notes that it is not an easy task to have a strong footing in business -- it takes much time.
"It takes a minimum of 50-60 years to become a corporate house. Yes, doing business here suddenly can lead to loss."
In this context, the man from the port city of Chattogram narrated his own track record in business, saying: "I have 10 companies. While I was doing business, one company may become a defaulter, Bangladesh Bank should help the remaining nine companies with money or allow them to do business."
On inflationary pressure on the economy and government steps the FBCCI president said achieving the target of 6.5-percent inflation in fiscal year 2024-25 has huge challenge.
The GDP growth in the budget has been set at 6.75 per cent and the inflation target at 6.5 percent. For the current fiscal year as well, the inflation target was fixed at 6.5 percent in the budget. But inflation stood at 9.89 per cent in May last, he told the journalists on a note of scepticism about taming such steep inflation down to the stipulated level.
"We consider it a huge challenge to achieve the target of inflation. The rise in inflation must be contained, though," he said.
"If not, the pain and suffering of common people will increase," said the chief of business community some of whose members come under criticism for irrational price rises.
He believes that good governance and proper monitoring can help tackle the challenges of budget implementation.
"It is important to ensure clear direction and planning to continuously improve efficiency, transparency, accountability and quality of oversight in budget implementation."
He suggests that partnerships between the public and private sectors should be strengthened to implement the budget.
According to the FBCCI, the total revenue-collection target, as proposed in the budget at Tk 5.41 trillion, which is 9.7 per cent of the GDP, is tough to touch, given the prevailing perspectives.
The target of the National Board of Revenue is Tk 4.8 trillion. "Mobilizing such huge revenue will be a big challenge for the government."
Ensuring business-friendly revenue management and reforming the National Board of Revenue are essential to achieve targeted revenue collection, the business body recommends.
Also, to increase the tax-GDP ratio it is necessary to increase the tax coverage and expand the tax net to Upazilas, the FBCCI chief said.
The apex body notes that the deficit in the proposed budget is Tk 2.56 trillion which is 4.6 per cent of the GDP. To meet the deficit, the government will have to borrow Tk 1.61 trillion from domestic sources. Out of this, 1.375 trillion would come from the banking system, according to budget documents.
"Excessive borrowing by the government from the banking system hinders the flow of credit to the private sector," it says about possible crowding-out effect of government borrowing for deficit financing.
As a result, investment and employment may be adversely affected. In order to meet the budget deficit, instead of the local banking system, attention can be paid to financing from foreign sources.
The FBCCI president points out that the government has adopted a zero-tolerance policy against corruption. "We welcome this initiative".
It is very important to maintain the quality of works undertaken under the annual development programme and to complete the works efficiently on time. Apart from this, efficiency should be taken into account in undertaking projects so that development becomes sustainable, the apex trade body suggests.
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