Unnecessary tax holidays set to go next fiscal year

The budget for fiscal year (FY), 2016-17, is expected to withdraw unnecessary tax holiday facilities which in the past were offered to help boost industrialisation and attract investments, officials said.
A list of such tax measures, which are deemed needless, is now under preparation, they added.
A senior official of the Ministry of Finance said the provision of tax holiday should not remain and needs to be reduced gradually.
"We should encourage all for providing taxes. If the government finds it necessary to assist a sector, special budgetary allocation can be made for that. It will help build tax-paying culture," said the official seeking anonymity.
Sources said during preparation of budget for the new fiscal year, officials have been asked not to keep provision of providing special tax holiday, especially in case of import duty and income tax.
They have been asked for keeping necessary budgetary allocations for payment of duty, tax, and fees while preparing budget of ministries and departments for the FY 2016-17.
According to officials, the new budget will give importance on preparing gender budget of 40 ministries and departments. Besides, a new concept paper will be prepared aiming at strengthening local government system.
Moreover, they said, in the budget the government will give importance on keeping budget deficit under control, cutting inflation, reducing appreciation of really effective exchange rate of Taka, keeping exchange rate at an expected level, financing and proper implementation of fast track projects including Padma multipurpose bridge, raising individual level investment, and taking measures to raise export and finding new markets.
According to officials, health, education, human resources development, power, energy, railways, ports and infrastructural development, agriculture, rural development, and employment generation are expected to get priority in the next fiscal budget.
The use of information and communication technology (ICT), building digital Bangladesh, capacity building to face the challenges of climate change, increased use of financial opportunities offered by development partners, raising earnings from abroad, and finding out new export markets will also get priorities, they added.
Officials said the new budget will set a target of 7.5 per cent GDP (gross domestic product) growth. It projects that the GDP size will be 19.5 trillion taka. The new budget will set target of keeping average inflation rate at 6.0 per cent.
When contacted, president of Dhaka Chamber of Commerce and Industry (DCCI) Hossain Khaled told the FE that such withdrawal of tax holiday facility will put a negative impact on new investments.
"We have to check in which perspective the government is making such a plan," he said.
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