Changes in duty-slab to hurt local industries: FBCCI
Sunday, 10 June 2007
FE Report
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the country's apex trade body, has hailed the 2007-08 national budget terming it as a welfare-oriented one.
"The finance adviser has tried to utilise the country's limited resources to achieve the millennium development goals (MDGs) in the light of poverty reduction strategy paper (PRSP)," FBCCI president Mir Nasir Hossain said lauding the budget proposals.
The apex body chief also came up with an appeal for restructing the tax measures especially to safeguard the country's industrial sector.
The FBCCI chief was speaking at a press conference organised at the FBCCI auditorium Saturday to make known the business community's opinion about the national budget presented by Finance and Planning Adviser AB Mirza Azizul Islam Thursday last.
"The proposals relating macro economic management, acceleration of gross domestic product (GDP) growth, poverty alleviation, human resources development, agriculture development and allocations on education, technology and power would facilitate overall economic development," the FBCCI president noted.
The FBCCI president was, however, critical about several tax measures as proposed in the budget especially the withdrawal of zero tariffs on textile machinery and reduction of supplementary duties on some finished products.
The country does not have sufficient backward linkage industries in the textile sector and, thus, the duty measure on the import of textile machinery will thwart the growth of textile sector, he added.
Pointing to the proposal of re-fixing the three-tier import duties at 10, 15 and 25 percent, up from the existing 5, 12 and 25 percent, the business leaders opined that it would cast adverse impact on local manufacturers.
Duty will increase to 10 per cent for around 1600 capital machinery and industrial raw materials due to this new tariff measure, the FBCCI leader maintained.
He urged the finance adviser to reconsider the tariff structure to protect the interests of local industries and augment export earnings.
The FBCCI leader welcomed the step to shoulder the mammoth burden of the state-owned Bangladesh Petroleum Corporation (BPC) worth Tk 75.23 billion, which, he said, was affecting the liquidity position of the nationalised commercial banks.
Mir Nasir recommended staggered-shouldering of the debt burden of the BPC to avoid any negative effect on the national economy.
The government might raise the amount through issuing government bonds in several years, he added.
He also demanded similar action for the privately owned sick industries either through writing off their debts or ensuring their rehabilitation.
The chief of the country's apex trade body also appreciated the proposal for imposition of a 45 per cent tax on mobile phone operators and 35 per cent for those which would be floating their shares in the country's stock markets.
Terming it as conducive to the growth of country's capital market, the FBCCI president demanded similar corporate tax measures for the business activities of non-governmental organisations (NGOs).
"Investments of the NGOs should be treated as income and thus imposition of necessary tax measures is required," he said.
The FBCCI president also sought government's future strategy on the existing tax holiday facility for private investments inside the export-processing zone (EPZ), which is set to expire in 2008.
"It will help the business community taking necessary investment decisions in future," said Mir Nasir Hossain adding the demand to create a level playing field by extending similar tax holiday facility to the industries outside the EPZs.
The FBCCI president hailed the finance adviser for lifting import duty from edible oil and lentil and also continuing the duty exemption facilities on some other essential items including rice, wheat and gram to keep their prices at tolerable levels.
Creation of endowment fund worth Tk 3.50 billion for research on agriculture sector, allotment of Tk 7.50 billion as subsidy for diesel and Tk 15 billion for fertiliser purchases were also hailed by the FBCCI president which, what the chamber leader said, would quicken poverty alleviation.
The top leader of the country's business community also praised the government for splitting the existing Equity Entrepreneurship Fund (EEF) into two funds - one for agriculture and another for information communication (IT) - with the proposal to allocate Tk 1.0 billion for each.
He, however, expressed his reservation on the proposal of imposition of duties on computers and computer accessories saying it might frustrate the growth of information and communication technology (ICT) sector in Bangladesh has low levels of the ICT penetration.
The FBCCI president also lauded the finance adviser's proposal to widen the tax net and curtail the discretionary powers of tax officials and demanded move for further cut in their powers to encourage more taxpayers to come under the tax net.
Hailing the proposal on the withdrawal of import duty on electronic cash registrar the FBCCI president hoped that it would bring about transparency in collecting value added taxes (VAT) properly.
During the press conference the FBCCI chief criticised a quarter of business people who has increased the sugar prices at wholesale level much before the implementation of the budget proposal.
"This trend is very bad," he said urging stern government action against such unscrupulous businessmen.
"The government has proposed an increased tariff rate on imported sugar that does not mean that it has already increased," he added.
The FBCCI president also lauded the proposals for extending social safety nets, significant budget allocations for human resources development and necessary measures to enhance electricity supply across the country.
Wrapping up reaction on the budget the FBCCI president said: "Attaining GDP growth rate of 7.0 per cent and containing inflation to 6.5 per cent in the next fiscal is possible subject to overall performance of the economic management."
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the country's apex trade body, has hailed the 2007-08 national budget terming it as a welfare-oriented one.
"The finance adviser has tried to utilise the country's limited resources to achieve the millennium development goals (MDGs) in the light of poverty reduction strategy paper (PRSP)," FBCCI president Mir Nasir Hossain said lauding the budget proposals.
The apex body chief also came up with an appeal for restructing the tax measures especially to safeguard the country's industrial sector.
The FBCCI chief was speaking at a press conference organised at the FBCCI auditorium Saturday to make known the business community's opinion about the national budget presented by Finance and Planning Adviser AB Mirza Azizul Islam Thursday last.
"The proposals relating macro economic management, acceleration of gross domestic product (GDP) growth, poverty alleviation, human resources development, agriculture development and allocations on education, technology and power would facilitate overall economic development," the FBCCI president noted.
The FBCCI president was, however, critical about several tax measures as proposed in the budget especially the withdrawal of zero tariffs on textile machinery and reduction of supplementary duties on some finished products.
The country does not have sufficient backward linkage industries in the textile sector and, thus, the duty measure on the import of textile machinery will thwart the growth of textile sector, he added.
Pointing to the proposal of re-fixing the three-tier import duties at 10, 15 and 25 percent, up from the existing 5, 12 and 25 percent, the business leaders opined that it would cast adverse impact on local manufacturers.
Duty will increase to 10 per cent for around 1600 capital machinery and industrial raw materials due to this new tariff measure, the FBCCI leader maintained.
He urged the finance adviser to reconsider the tariff structure to protect the interests of local industries and augment export earnings.
The FBCCI leader welcomed the step to shoulder the mammoth burden of the state-owned Bangladesh Petroleum Corporation (BPC) worth Tk 75.23 billion, which, he said, was affecting the liquidity position of the nationalised commercial banks.
Mir Nasir recommended staggered-shouldering of the debt burden of the BPC to avoid any negative effect on the national economy.
The government might raise the amount through issuing government bonds in several years, he added.
He also demanded similar action for the privately owned sick industries either through writing off their debts or ensuring their rehabilitation.
The chief of the country's apex trade body also appreciated the proposal for imposition of a 45 per cent tax on mobile phone operators and 35 per cent for those which would be floating their shares in the country's stock markets.
Terming it as conducive to the growth of country's capital market, the FBCCI president demanded similar corporate tax measures for the business activities of non-governmental organisations (NGOs).
"Investments of the NGOs should be treated as income and thus imposition of necessary tax measures is required," he said.
The FBCCI president also sought government's future strategy on the existing tax holiday facility for private investments inside the export-processing zone (EPZ), which is set to expire in 2008.
"It will help the business community taking necessary investment decisions in future," said Mir Nasir Hossain adding the demand to create a level playing field by extending similar tax holiday facility to the industries outside the EPZs.
The FBCCI president hailed the finance adviser for lifting import duty from edible oil and lentil and also continuing the duty exemption facilities on some other essential items including rice, wheat and gram to keep their prices at tolerable levels.
Creation of endowment fund worth Tk 3.50 billion for research on agriculture sector, allotment of Tk 7.50 billion as subsidy for diesel and Tk 15 billion for fertiliser purchases were also hailed by the FBCCI president which, what the chamber leader said, would quicken poverty alleviation.
The top leader of the country's business community also praised the government for splitting the existing Equity Entrepreneurship Fund (EEF) into two funds - one for agriculture and another for information communication (IT) - with the proposal to allocate Tk 1.0 billion for each.
He, however, expressed his reservation on the proposal of imposition of duties on computers and computer accessories saying it might frustrate the growth of information and communication technology (ICT) sector in Bangladesh has low levels of the ICT penetration.
The FBCCI president also lauded the finance adviser's proposal to widen the tax net and curtail the discretionary powers of tax officials and demanded move for further cut in their powers to encourage more taxpayers to come under the tax net.
Hailing the proposal on the withdrawal of import duty on electronic cash registrar the FBCCI president hoped that it would bring about transparency in collecting value added taxes (VAT) properly.
During the press conference the FBCCI chief criticised a quarter of business people who has increased the sugar prices at wholesale level much before the implementation of the budget proposal.
"This trend is very bad," he said urging stern government action against such unscrupulous businessmen.
"The government has proposed an increased tariff rate on imported sugar that does not mean that it has already increased," he added.
The FBCCI president also lauded the proposals for extending social safety nets, significant budget allocations for human resources development and necessary measures to enhance electricity supply across the country.
Wrapping up reaction on the budget the FBCCI president said: "Attaining GDP growth rate of 7.0 per cent and containing inflation to 6.5 per cent in the next fiscal is possible subject to overall performance of the economic management."