Govt's reliance on bank borrowing will put pressure on private sector: DCCI
The DCCI president welcomed the initiative of the prospective tax system in place for the fiscal year 2024-25 and 2025-26, calling it is a good move which will help boost foreign direct investment (FDI).
If the government's bank borrowing increases in the next fiscal year, private sector credit flow may shrink, Dhaka Chamber of Commerce and Industry (DCCI) President Ashraf Ahmed said today (6 June).
"The government's bank borrowing target is almost 11.82% less than the previous fiscal. But still it is high," he said in an immediate response to the proposed national budget for the fiscal year 2024-25.
Ashraf Ahmed welcomed the initiative of the prospective tax system in place for the fiscal year 2024-25 and 2025-26, calling it is a good move which will help boost foreign direct investment (FDI).
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"This year, the government has tried to increase the revenue collection amidst efforts to contain inflationary pressure on the economy by controlling the budget deficit, reducing various import duty and advance tax on various essential products. Import duty on almost 30 essential products has been reduced, which is a good move," he said.
Mentioning that the tax administrative system is a bit complex for the SME sector, he suggested a separate tax code for the SME sector.
"Budget deficit target is about 4.6% which is lower than previous years. It is implementable but the main challenge is revenue collection. Without widening the tax net, it will be difficult to collect higher revenue. But we need to increase the tax-GDP ratio," he added.
Replying to a question from a journalist, the DCCI president said, "Government has reduced various taxes and VAT. On the other hand, a few items will see more tax. But as a whole it may not impact the businesses too harshly. The main challenge for this year will be implementation of the good initiatives of this budget."
Both for listed and non-listed companies, the corporate tax rate has been conditionally reduced by 2.5%, which is a good move, he mentioned.
He also stressed on ADP implementation for a sustainable socio-economic development.
Ashraf Ahmed thanked the government, mentioning that this proposed budget tried to address the inflation issue as well as fostering local investment, ensuring export diversification, widening tax net, and reducing dependency on financial sector to ease deficit budget.
