Businesses express mixed reaction

The country's businesses have expressed a range of opinions regarding the proposed budget for the financial year 2023-24.
They have noted that the budget reflects both promises made during an election year and attempts to tackle ongoing and impending issues such as inflation, foreign reserves, dollar prices, LDC graduations, and universal pensions, among others.
The trade bodies have described the 16 per cent revenue growth target as "ambitious", requiring significant reforms in tax administration to achieve.
Most of the trade bodies expressed their dissatisfaction with the proposed individual tax ceiling set at Tk 3,50,000, as it differs from the recommendations made by various business organisations ranging from Tk 4,00,000 to 5,00,000.
On top of it, they have called on the government to reconsider the decision regarding the minimum tax return of Tk 2,000 for taxpayer identification number (TIN) holders.
In his initial reaction, Md Jashim Uddin, the president of the apex trade body Federation of Bangladesh Chambers of Commerce & Industries (FBCCI), expressed concerns about the challenges associated with attaining the revenue target.
"There are challenges in the budget, and revenue collection might be a challenge," he shared his views on the proposed budget at the FBCCI office in the capital.
"We always say, we have to get out of the easy way [for revenue collection]," he said, adding that the revenue target requires structural reforms.
Jashim Uddin stressed the importance of capacity building within the National Board of Revenue (NBR) to increase revenue earnings.
He highlighted that when the NBR sets ambitious targets, businesses become apprehensive, stating, "This time there is a 16 per cent tax growth... if you say that the collection will be more, we businesses are worried that it will come to us! It always happens."
In budget reaction, the Dhaka Chamber of Commerce and Industries (DCCI) underscored the importance of a partnership between the revenue board and the private sector to achieve the demanding revenue target.
While speaking at a press conference, Barrister Md Sameer Sattar, the President of DCCI, suggested that the government increase the tax-free income limit to Tk 5,00,000, considering the current inflation situation.
He also recommended the withdrawal of the compulsory Tk 2,000 tax for TIN holders to get a number of government services.
Sattar stressed the significance of implementing automation in the taxation system and expanding the tax net to fulfil the higher revenue target. He commended the decision to reduce the documentation process when submitting corporate companies' withholding tax returns.
Barrister Sattar urged the NBR to reduce the tax rate for non-listed companies by at least 2.5 per cent, highlighting that the country's corporate tax rate is high compared to other South Asian neighbours.
In budget reaction, the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), requested discussions with stakeholders before the introduction of the 'Income Tax Act, 2023' in the upcoming budget session.
The MCCI pointed out significant challenges involved in implementing the budget in the current context.
However, the chamber believes if the budget were to be implemented properly, there would be opportunities to manage the budget dynamics, reform tax policies, automate the tax system, reduce overall system losses in tax collection, enhance the capacity of tax administration and provide better services to the people.
The MCCI said it has consistently advocated for meaningful structural changes in the tax administration to ensure proper revenue collection.
It identified a double bind in government bank borrowing, noting, "First, an increase in borrowing from the banking system may create a crowding-out impact on the economy and lead to fund shortages for private-sector investors, and second, if the government borrows from the central bank, inflationary pressure will build up."
The trade body suggested reconsidering the minimum tax of Tk 2,000 in the unorganised sector.
In the budget reaction, the Foreign Investors' Chamber of Commerce and Industry (FICCI) said it believes that the proposed targets are challenging. However, they acknowledged that achieving these targets would bring momentum to the economy.
The American Chamber of Commerce in Bangladesh (AmCham), in a budget reaction, recommended adopting a crisis management contingency approach, prioritising expenditures and ensuring policy continuity in key procedural matters.
To strengthen the foreign reserve, it suggested accelerating the implementation of foreign-funded projects and reevaluating domestically funded projects with significant import components to mitigate the impact of volatile energy inputs and help finance balance-of-payments deficits.
In their budget reaction, the Institute of Chartered Accountants of Bangladesh (ICAB) said that the joint initiative of the NBR and ICAB in implementing the Document Verification System (DVS) will facilitate the achievement of the targeted revenue.
The Bangladesh Women Chamber of Commerce & Industry (BWCCI) welcomed the provision of increasing the tax limit for women, considering the proposed budget for the fiscal year 2023-24 as rational and extensive.
Alamgir Shamsul Alamin (Kajal), the president of the Real Estate and Housing Association of Bangladesh (REHAB), expresses concern in his budget response.
He believes that the increase in income tax at source during land registration and the introduction of additional taxes on various construction materials in the proposed budget will lead the country's housing industry towards a crisis.
The Bangladesh Frozen Food Exporters Association (BFFEA) has demanded a reduction in the source tax from 1.0 per cent to 0.25 per cent for frozen fish exports.
The association's president considers it irrational to impose a 1.0 per cent source tax on frozen shrimp and other fish exports, given that the sector has been experiencing losses for a prolonged period.
The Chittagong Chamber of Commerce and Industry (CCCI) views the current fiscal budget as pro-development, which will contribute to making Bangladesh a smart country.