Some demands still unmet: Business leaders
Business community welcomes the tax cut proposals in the proposed budget in general, but they also had some demands and suggestions. Six heads of business groups and companies talk to The Business Standard's Abbas Uddin Noyon about their thoughts on the proposed budget.
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Expectations in cement sector met to some extent
Md Shahidullah is the managing director of Metrocem Group
The cement industry directly or indirectly employs millions of construction workers, officials and employees. This sector has been exporting cement for the last 15 years after meeting the demand of the entire country. It goes without saying that there is no construction work in the country due to the prevalence of Covid-19 and lockdown.
In this situation, the cement sector has been exempted from the advanced income tax (AIT) in the proposed budget. The current AIT has been reduced from 3% to 2%. On the other hand, advance VAT on trade has been decreased from 3% to 2%. These two issues will reduce the traders’ cost.
Companies will benefit from a 2.5% percentage point tax cut for both listed and non-listed companies. This will increase business confidence.
However, there was no announcement in the budget to reduce the import duty on clinker, the main raw material for cement. We have requested a duty of Tk300 per tonne instead of Tk500 for import of clinker. We believe that the government will gradually listen to this demand.
Housing sector will continue turning around
Alamgir Shamsul Alamin (Kajal) is the managing director of Shamsul Alamin Real Estate Limited
The housing sector has received around Tk5,000 crore in the last one year due to the opportunity to invest undisclosed money without any question in the current fiscal year. This has boosted the economy. It has created new jobs. The finance minister did not say anything directly in the budget proposal about the opportunity to whiten black money in the next fiscal year, but we think the opportunity will continue.
The corporate tax rate has been reduced in the budget for all companies listed and not listed. We see this as very positive. This will result in new investments. The traders will have money in their hands. They can invest in real estate.
Although the budget is good overall, we still have some demands for the real estate business. At present the rate of registration cost of our flats and plots is 10-12.5%. Even then it is higher than the cost of registration in other Saarc countries. We demand that the government considers reducing our registration cost before the budget is passed.
Reducing corporate tax to boost traders’ confidence
Faruque Hassan is the managing director of Giant Group
The proposed budget for the next financial year is investment and industry-friendly. Several exemptions have been made in the budget for new investments. Reducing corporate tax rates will boost the confidence of traders. However, there were some options for export-oriented industries.
The government is currently levying duty at 1% on the import of machinery in the readymade garments and textile sectors. We have demanded this benefit in importing spare parts too. The government does not collect large revenue from here but there are chances for harassment of traders.
In global garments, 74% is non-cotton based but we are just the opposite with 80% cotton based apparels. As a result, we fall behind in the competition and this system needs to be changed quickly.
Bangladesh will develop a vibrant automobile industry
Abdul Matlub Ahmad is the president and chairman of Nitol Niloy Group
The proposed tax holiday for one-decade, extendable for another decade, for automobile manufacturing will help attract foreign automobile companies for joint ventures in Bangladesh.
The same would be possible for manufacturing automobile components locally.
Having the two together, Bangladesh will develop a vibrant local automobile industry that has potential to grow the market manifolds and make four wheelers, three wheelers and two wheelers’ unit prices affordable to the people.
Appreciating the government for the prudent announcement regarding our industries, I also express my concern about the implementation of the measures taken as the challenges in implementation are much higher here without any acceptable reason.
Price reduction of mopeds, microbuses would help boost people’s economic activities, though we were expecting some fiscal measures to make other vehicles cheaper in the new fiscal year.
Good news for electronics, home appliance industry
Ruhul Alam Al Mahbub is the managing director of Fair Electronics LTD
The demand for electronics and home appliance products has increased in the last decade following an expansion of electricity services in the country and changes in the quality of life of the people. VAT exemption facilities provided by the government has facilitated huge investment in this sector, and these products have made people’s lives easier.
Samsung’s products are being produced in Bangladesh due to the government’s policy benefits. Around 15 domestic and foreign companies have invested and millions of people have been employed. In 2020, 85% of the demand for handsets was either manufactured or assembled by domestic companies.
This has happened in just five years due to the policy support of the government.
In his budget speech, the finance minister recommended that VAT exemption facilities be extended for manufacturers of refrigerators, freezers and their compressors by one more year, and mobile handset, air conditioners and their compressors by three more years.
The government has also exempted VAT for home appliance manufacturers such as blenders, juicers, mixers, grinders, electric kettles, rice cookers, multicookers, pressure cookers, washing machines, microwave ovens and electric ovens, which is a big relief for the local industry.
Budget is domestic industry-friendly
Abu Noman Howlader is the founder of BBS Group
The proposed budget is investment-friendly and local industry-friendly. Investment has been attracted by reducing corporate tax rates and declaring tax holidays in various industries.
The government has reduced advance income tax (AIT) in raw material imports for cement. The construction sector has been given several tariff concessions on the import of raw materials including rods. As a result, existing industries will be benefited and new industries will be formed.
If new industries are established in the country, a large number of people will be employed. The wheel of the economy will continue to move. All kinds of business have a role in keeping the economy moving. If employment is created, people’s expenditure will remain normal. Any industry will benefit from this.
However, some more measures could be taken to protect the local industry. Our demand was to have at least 15% local preference in any project tender.
