Next budget to see further cut in CD, SD: Muhith

Finance Minister AMA Muhith on Monday hinted at reducing the customs and supplementary duty which, some people fear, would expose the domestic industry to an uneven competition.
"I am warning you. We are set to move into a new tax regime in 2016 when there will be heavy reduction of customs duty (CD) and supplementary duty (SD)," the minister told a delegation of the Dhaka Chambers of Commerce and Industry (DCCI) at a pre-budget discussion at the ministry's conference room.
He said in Bangladesh, local industries have been given protection to a great extent. Here supplementary duty is being imposed on a lot of areas.
"Last year, we had reduced CD and SD in some cases. We have to do it again this year since we have no other options," Mr Muhith said.
The minister said: "In our tax policy, we try to do our best for our domestic industries. But it creates problems when you seek relief for an indefinite period of time. It can't be done."
At this stage, Mr Muhith cited the example of ICT (information and communication technology) sector which sought tax relief for 10 more years.
"The ICT sector gets good tax relief. Now they want it until 2024. I think it's too much. No government should extend facilities beyond its tenure," he said.
DCCI president Hossain Khaled placed 14- point proposals to the finance minister for consideration in the upcoming budget. DCCI senior vice president Humayun Rashid, vice president Shoaib Chowdhury, directors Mohammad Shahjahan Khan, Abdus Salam, Atique-E-Rabban, Muktar Hossain Chowdhury, A K D Khair Mohammad Khan, Osman Gani, Nesser Maksud Khan, and Asif A Chowdhury were present, among others, on the occasion.
Mr Khaled in his speech thanked the minister for discontinuing the facility for whitening the legally-earned undisclosed money in the last budget but requested him to take steps for elimination of sources that help accumulation of undisclosed money.
The DCCI president also proposed, among others, tax cards to all taxpayers, tax waiver and port charge reduction to businessmen who suffered during the last political turmoil, expansion of tax net, waiver of tax on chamber and trade bodies, declaration of automobile and automotive industry as import substitute industry, and fixing value added tax (VAT) at 7.5 per cent in new VAT law.
He also pleaded for raising import and supplementary duties to give protection to domestic industry, raising allocation in annual development programme to reduce traffic congestion, adjustment of petroleum prices, and branding of Bangladesh as a 'country of skilled, semi-skilled and competitive labour force'.
Replying to the DCCI's demands, Mr Muhith said petroleum prices of course need to be adjusted to some extent.
He said Bangladesh still calculates tax on petroleum products taking into consideration its price at US$30, but the price is still at $50. "Now we want to make some adjustment to get to a stage where it can be more realistic."
Regarding providing incentives to businessmen who suffered during the recent political crisis, the minister said the government is assessing the losses and may offer some facilities like reduction of port charges after the assessment is over.
The minister said at this stage power is no more an infrastructural bottleneck. "Yes, there is some disruption in power supply because of poor transmission and distribution. But now we are giving greater emphasise on transmission and distribution," he said.
On putting the budget into effect soon after its announcement, Mr Muhith said in the past it used to be made effective after its passage in the parliament.
Terming its immediate effectiveness just after announcement of the budget 'foolish', the minister said nowadays it has become a tradition. "There is no way to go back."
Mr Muhith said the government has now taken a programme to reorganise the inland water transport system. There was a programme with the World Bank in 1950s for inland water transport sector. After that, nothing has been done.
"Now we are going to do something for the sector. The number of routes will be reduced. Steps will be taken to develop the landing ports state of which has become very poor."
The minister also assured steps for arranging safe transportation system for women.
Mr Muhith was hopeful that Bangladesh would become the number one in apparel export within a short period of time. The target of earning $50 billion through exporting apparels by 2021 will be realised.  
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