Proposed budget to boost confidence of businesses

Businesses in almost all sectors have incurred pandemic-induced losses. In such a situation, all have high expectations from the budget. And, many demands of businesspeople have been met in the proposed budget for FY22. 

Corporate tax for listed and non-listed companies has been cut by 2.5 percentage points to rejuvenate the economy. They have long been demanding this tax cut. But the corporate tax rate will have to be further reduced in stages.  

In the budget, new companies engaged in manufacturing home appliances, light engineering, automobiles, and IT have been exempted from tax. In the case of one-person-company, corporate tax has been fixed at 25%. These are definitely good initiatives. However, further reduction of corporate tax rates in phases will encourage small and medium investors.

The VAT exemption has been given on production of IT, cement, steel, electronics and modern agricultural machinery alongside home electronics to develop domestic industries. This is at least a timely decision.

Global export demand has declined during this pandemic. In such a situation, advance income tax on imports of raw materials for export-oriented garment industry, leather, jute and jute goods, agro-processed products and pharmaceutical products has been rationalised. 

Besides, tax on imported fruits and vegetables has been increased by 5%, which will give protection to local agriculture entrepreneurs.

Reviewing the budget as a whole, we can call it the pandemic recovery Budget. These budget facilities will increase the confidence of businesses.

Rizwan Rahman is the president of Dhaka Chamber of Commerce and Industry