What CEOs expect in new budget
The Business Standard talked to several chief executives in different sectors about their expectations in the budget for the fiscal year 2021-22
'Opportunities to invest black money in housing should continue'
Alamgir Shamsul Alamin (Kajal), Managing Director, Shamsul Alamin Real Estate
The housing sector received around Tk5,000 crore in the last one year due to the opportunity to invest undisclosed money without being questioned in the current financial year. This has boosted the economy and created new jobs. That is why we want this opportunity for five to 10 years.
Registration cost is 10-12% at present, which is more than the South Asian Association for Regional Cooperation (Saarc) countries. I call on the authorities to reduce registration cost to 7% in the budget for the 2021-22 financial year.
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Buying flats is gradually becoming a pipe dream for ordinary citizens due to skyrocketing prices. This problem can be solved to some extent by arranging long-term, low-interest loans for buyers. That is why I have long been demanding that a Tk20,000 crore refinancing fund be formed.
'Local firms should get 15% preference in project tenders'
Engr Abu Noman Howlader, Founder, BBS Group
The government's development-oriented thinking has resulted in the implementation of lots of projects in the last one decade. Local manufacturers are able to supply materials used in these projects. Several companies, including BBS Cables, are producing world-class cables. Local producers are self-reliant in almost all branches of the construction material sector, including aluminum and steel.
Local companies keep the wheel of the economy running by paying tax and VAT. They take risks and invest, thus creating jobs. The preference for local companies should be at least 15% in project tenders in the interest of sustaining the local industry.
Also, the customs law should be simplified to facilitate the unloading of goods and access to bank loans.
'VAT exemptions for electronics should continue'
Ruhul Alam Al Mahbub, Managing Director, Fair Electronics
In 2020, 85% of the demand for handsets was met by local companies. This happened in just five years due to the government's policy support.
We are currently enjoying VAT and tax exemptions provided for high-tech parks. Besides being self-sufficient, we have also created opportunities to export products to various countries, including in Africa and the Middle East. This opportunity needs to be continued for at least the next two years.
The demand for electronics and home appliances increased in the last few years due to progress in the electricity sector and changes in people's quality of life. These products have made people's lives easier. This sector has seen massive investments due to VAT exemptions.
Samsung products are now manufactured in Bangladesh due to the government's policy support. 14-15 local and foreign companies have invested and more than one lakh people have got jobs. This facility should be continued in the next budget.
'Supplementary duty on local ceramic products should be withdrawn'
Md Shirajul Islam Mollah, Managing Director, China-Bangla Ceramic Industries Ltd
There are now 68 ceramic factories in the country with an investment of around Tk9,000 crore. These factories meet about 90% of the local demand.
This labour-intensive industry is very suitable for our country, but about 90% of the raw materials are imported. Due to additional import duties imposed on these products, we are unable to compete with foreign competitors. I urge the authorities to reduce import duties in this sector to 5%.
Ceramic products are no longer a luxury. Most people now use tiles and sanitary products at home. It is necessary to withdraw the 15% supplementary duty on tiles, and 10% on sanitary products.
'Cement raw material imports should get duty exemptions'
Md Shahidullah, Managing Director, Metrocem Group
The cement industry directly and indirectly employs several lakh construction workers, officials, and employees. This sector has been exporting cement for 15 years by meeting 100% of the local demand. Construction projects in the country have almost come to a halt due to the Covid-19 pandemic and lockdowns.
We have requested the authorities to set the import duty on clinker, the main raw material of cement, at Tk300 per tonne instead of Tk500 in the new budget. Also, in the current budget, I urge the authorities to reconsider the provision of deeming the 3% advance tax the final liability at the import stage.
'Garment, textile fibre imports should get duty exemptions'
Faruque Hassan, Managing Director, Giant Group
Globally, 84% of garment products are non-cotton items, but we are the opposite. 70% of our products are cotton-based, causing us to lag behind in the competition. This needs to be changed quickly.
At present, there is no duty on cotton imports, and 15% on non-cotton fibre imports, as apparel raw materials. Entrepreneurs import cotton due to duty-free facilities and thus lag behind.
The government should provide duty-free facilities for non-cotton garment raw material imports to keep the clothing industry competitive. If fibre is available, the industry will be able to deal with the crisis.
On the other hand, importing capital equipment is subject to 1% duty but that of spare parts comes with a duty of 26-104%. To deal with the Covid-19 crisis and survive in the competitive market, the government should provide exemptions in both cases.
'This budget should make automobiles affordable, incentivise localisation'
Abdul Matlub Ahmad, Chairman, Nitol-Niloy Group
Considering the declining market situation, the new budget should address the affordability of all types of automobiles. The four-wheeler market has been in decline for several years. This is hurting business and has also squeezed government revenues.
I am hopeful that the upcoming budget will reduce duties and taxes on four-wheelers so that unit prices come down by several lakh taka and people can buy more. Also, this budget should address the need for incentivising local industries, which is very crucial at this point of the beginning of localisation.
Motorcycle manufacturing has gained a noticeable momentum here and there is now a need for locally manufacturing more components. Fiscal measures must attract fresh investments in this sector.
Four-wheeler assemblers, who also aspire to be manufacturers in the coming days, need supportive policies while incentivising their component manufacturers will facilitate the potential take-off.
Electric vehicles are the future and the government should incentivise the potential market growth and localisation initiatives.
