TBT DESK: The proposed national budget has fallen short of meeting the expectations of the business community in fostering a conducive environment for business growth and investment, said Dhaka Chamber of Commerce & Industry (DCCI) President Taskeen Ahmed in his initial reaction on Monday.
"We have seen a few positive steps such as initiatives to control inflation, certain tax waivers, an automated return system, reduction of some advance taxes, the proposal for a central bonded warehouse, and VAT exemption on LNG imports. However, overall, it is a mixed budget, and businesses will still face pressure due to some of the tax burdens," he said.
On the issue of the tax-free income threshold, he noted that it has remained largely unchanged this year.
This, he added, will place an additional tax burden on taxpayers-particularly middle-income groups and service holders-from the next fiscal year.
Taskeen welcomed the proposed Tk100 crore fund for youth entrepreneurs as a positive initiative, but expressed concern that online sellers will face additional costs, which could discourage new startups.
He pointed out that although internet costs have been reduced, the proposed VAT hike on mobile phones may hinder progress in the country's digitisation process.
Expressing dissatisfaction over the proposed increase in import duty on automobile spare parts-from 10 percent to 25 percent-he warned that this would adversely affect the local automotive industry. The DCCI President also termed the revenue collection target as ambitious and said that the government's continued reliance on indirect taxes poses a challenge.
Taskeen further cautioned that the government's dependency on local banks to meet the budget deficit would reduce credit flow to the private sector.
He criticised the proposal to raise the turnover tax from 0.6 percent to 1 percent, saying it would raise the cost of doing business.
Taskeen urged the government to lower the cost of borrowing for businesses, suggesting an ideal rate between 6 and 7 percent to support growth.
Finally, Taskeen stressed the importance of quality implementation of the Annual Development Programme (ADP) and called for austerity in government expenditure.