Next budget should be pro-business, investment, considering LDC graduation: Business leaders
"Businesses submit bank guarantees to clear goods through customs, but when it's time to release those guarantees, we are forced to pay Tk50,000 in bribes for each one. If we had paid the tax instead, it would've only been Tk30,000," says BTMA President Mohammad Showkat Aziz Russell
Highlights:
- Businesses seek investment-friendly budget amid global uncertainties and upcoming LDC graduation
- FBCCI calls for raising tax-free income limit to Tk450,000
- BTMA alleges Tk50,000 bribe for getting each certificate from VAT officer for machinery import; tax would've been lower
- Meghna Group says local firms face power, gas crisis despite govt encouraging foreign investment
- Claims $600 million investment stalled by infrastructure issues
- Finance adviser says Bangladesh may seek more time from Trump administration on tariffs
- Says this year's budget will be realistic, time of tax exemptions over
Business leaders want the upcoming FY2025-26 budget to be investment and business-friendly, taking into account Bangladesh's forthcoming graduation from the LDC category as well as the ongoing global financial uncertainties.
"Given the current global economic challenges and domestic pressures, stakeholders have high expectations from the interim government regarding the next budget," FBCCI Administrator Md Hafizur Rahman said during the 45th meeting of the Consultative Committee of the National Board of Revenue (NBR), held in collaboration with the key stakeholders at a hotel in the capital today (30 April).
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The meeting commenced around 11am, with Finance Adviser Salehuddin Ahmed attending as the chief guest.
Hafizur said FBCCI believes the upcoming budget must also take into account the spirit of the July 2024 uprising.
"The focus will be on restoring confidence in business and trade through consistent policy support," Hafizur added.
'Businesses forced to pay huge bribes to get certificates from VAT offices'
Speaking at the event, Bangladesh Textile Mills Association (BTMA) President Mohammad Showkat Aziz Russell has alleged that businesses are being compelled to pay huge sums of money in bribes for getting each certificate from each VAT officer, though the payable tax is much lower.
"Businesses submit need to get certificate after installing the machinery from the VAT offices. We are forced to pay Tk50,000 in bribes for each one. If we had paid the tax instead, it would've only been Tk30,000," he said.
Rasel pointed out that previously, these release certificates were issued by the association itself, but the responsibility was later handed over to VAT offices.
"Now we are forced to pay bribes for something that used to be straightforward. The NBR doesn't gain anything from this change, but it creates serious problems for businesses," he added.
The BTMA president also highlighted the ongoing power and gas crises facing the industrial sector and urged the government to extend existing corporate tax facilities until 2028.
FBCCI for raising tax-free income limit to Tk450,000
At the meeting, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) called on the government to increase the tax-free income limit to Tk450,000 for general taxpayers in the upcoming FY2025-26 budget.
The apex trade body also proposed a higher tax-free threshold of Tk500,000 for women and senior citizens (above 65 years).
FBCCI Administrator Md Hafizur Rahman emphasised the necessity of raising the limit for these groups, citing inflation and the rising cost of living.
Hafizur Rahman said the lower income people are forced to spend a major part of their income to buy daily essentials in this economic condition.
In this situation, the existing tax structure is putting an additional pressure on them, he added.
'Govt encourages foreign investments while local investors face power, gas crisis'
Meanwhile, Meghna Group Chairman Mostafa Kamal said the government continues to encourage foreign investment while local entrepreneurs are struggling to access basic infrastructure facilities, and gas and electricity.
We are calling on foreign investors to come to Bangladesh, yet domestic entrepreneurs are not getting the infrastructure support we need.
He claimed that his company is still deprived of necessary gas and electricity connections despite investing $600 million in a major industrial venture
"We are calling on foreign investors to come to Bangladesh, yet domestic entrepreneurs are not getting the infrastructure support we need. We are suffering due to the ongoing gas and power crisis. This issue must be addressed," he said.
Kamal also urged the National Board of Revenue (NBR) not to harass businesses indiscriminately. He raised concerns over exercising powers arbitrarily by customs authorities during the assessment of imported goods.
"On one hand, customs determine valuation during assessment as they see fit. On the other, businesses are being accused of under-invoicing or over-invoicing. This inconsistency needs to be resolved," he added.
'Bangladesh will ask for more time if needed from Trump after tariff pause'
During his keynote speech at the programme, Finance Adviser Salehuddin Ahmed said Bangladesh might ask for more time, if needed, from the Trump administration after the 90-day tariff pause period.
"We will ask for more time if needed. We will increase our engagement with the Trump administration," he said.
The finance adviser also reassured business leaders that their reasonable demands would be reflected in the upcoming budget as much as possible. At the same time, he reminded them that the government is under pressure to increase revenue collection.
'Budget will be realistic this year'
Salehuddin Ahmed commented that this year's budget will be realistic. He also remarked that the days of tax exemptions are over.
"This time, we will make a realistic budget. We won't do it like conventional budgets. We will try to do what we say. People should say it was a good budget even after we're gone," he said.
"Previously, large budgets were approved but not implemented. We aim to implement the budget we make," said the finance adviser.
'Days of tax exemptions over'
Addressing the business leaders, Salehuddin said, "Business competition will increase due to Trump's tariff policy. Business owners also need to become competitive. Trump has given us three months, and we will ask for more time."
He also said businesses will benefit if the owners pay taxes.
"But many want tax exemptions or rebates. You must understand that the days of exemptions are gone. We are under a lot of pressure to increase revenue. You will enjoy the benefits of the taxes you pay. Remember - I pay tax, I get the benefit," the finance adviser said.
"I will try to fulfil your [business owners] demands in the budget as much as possible. But you need to be sympathetic towards us, and we will be sympathetic towards you," he added.
The finance adviser also said those at the marginal level or the smaller chambers often don't get heard. "We are working for you," he said.
'Interim govt doesn't mind criticisms'
During his speech, Salehuddin Ahmed said, "We are receiving a lot of criticism now, but we don't mind that. When you work, you have to hear these things. We have mistakes and errors. There might be mistakes. Still, we are trying to keep the general public comfortable."
"Business owners need to be patient, and we will remain patient. We will try to coordinate with you," he said, addressing the business owners.
Regarding the IMF's conditions, the finance adviser said, "We didn't only talk with the IMF or World Bank. We have spoken with all parties. We haven't yet agreed on terms with the IMF. We are trying."
NBR Chairman Md Abdur Rahman Khan chaired today's consultative meeting. It was also attended by Commerce Adviser Sheikh Bashiruddin and Bangladesh Investment Development Authority (Bida) Executive Chairman Chowdhury Ashik Mahmud Bin Harun.
Business proposals were presented by Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Executive President Mohammad Hatem, Bangladesh Textile Mills Association (BTMA) President Showkat Aziz Russell, Real Estate & Housing Association of Bangladesh (Rehab) Director Ayub Ali, among others.
FBCCI Administrator Hafizur Rahman moderated the programme.
