Khulna budget reaction: Revision of source tax on export, tax-free income limit demanded

People from different tiers in Khulna including business chambers, industrialists, workers' organisations, traders, environmental activists, workers' unions and political leaders have expressed mixed reactions to the proposed budget for 2022-23 fiscal.

They have made a demand for reduction of source tax in the export sector, increasing tax-free income limit, allocations for jute mill workers, and increasing tax on tobacco and plastics.

Bangladesh Frozen Foods Exporters Association (BFFEA) in Khulna demanded reducing source tax on the export of frozen shrimp and other fish from 1% to 0.25%.

Md Amin Ullah, president of BFFEA, said, "Since the frozen shrimp and other fish export sector has been running at a loss for the past decade due to various reasons, I think the 1% source tax levied on the export of this sector is not reasonable. I am calling for fixing it at 0.25%."

"Currently, the Russia-Ukraine war has caused a recession in the world economy, including Europe, and the price of shrimp in the world market has dropped by about $2 per kg. It is also becoming difficult for us to compete with lower-priced Venami shrimp in the international market. Therefore, I am requesting the finance minister to increase the cash assistance provided by the government from 10% for shrimp and 5% for other fish to 20%," he said.

He further requested to abolish the 10% income tax deduction on cash assistance for the exports in this sector.

Khulna Chamber of Commerce and Industry considers the national budget for the financial year 2022-2023 as beneficial, realistic, development-oriented, agriculture and business-friendly and up-to-date.

However, the chamber demanded increasing the limit of tax-free income at the individual level from Tk3 lakh to Tk3.5 lakh. It also demanded a reduction of VAT in the pharmaceutical industry at the production level and adequate allocation for the opening of the Khan Jahan Ali Airport as soon as possible.
 
Kazi Aminul Haque, president of Khulna Chamber of Commerce and Industry, said, "We thank the finance minister for the allocation of Tk5,000 crore for disaster relief, keeping the interest rate on savings certificates unchanged, and giving tax exemption for employing 25 disabled and third gender people."

The budget has proposed to increase supplementary duty on some vehicles which would subsequently increase prices.

However, people concerned said that the middle class will not suffer from the increase in car prices.

Ahsanur Rahman Arju, chairman of the standing committee of Bangladesh Reconditioned Vehicles Importers and Dealers Association, Mongla port, said, "The proposed budget has increased the supplementary duty on some vehicles. As a result, the price of vehicles with a capacity of more than 2,000cc will increase by Tk2 lakh to Tk5 lakh.

He said, "Most of the cars sold in our country have a capacity of 1,500cc to 2,000cc. Only 2% to 4% of the buyers in the country buy cars with a higher capacity, which are luxury cars."

"People from middle-class families do not usually buy luxury cars, so they have nothing to worry about the price hike," he added.

Ahsanur Rahman Arju said, "Earlier, the supplementary duty on vehicles of 2,001cc to 3,000cc was 200%, now it has been increased to 250%. This does not mean that the price will go up by much."

"Supplementary duty on vehicles from 3,001cc to 4,000cc has been increased from 350% to 500%. However, the supplementary duty on vehicles above 4,000cc has been kept the same as before i.e. 500%. Only 2% to 4% of the buyers buy these cars," he further said.

Captain Rafiqul Islam, president of Bangladesh Shipping Agents Association (BFAA), said, "The government does not fix the shipping fare during importing cars. The port fare is determined by the port authorities which is not related to the national budget. So, the cost of transporting 2,000cc vehicles will be the same as before."
 
Jute traders are not worried, workers expressed concern

Jute mills workers' associations in Khulna have expressed concern as the proposed budget has not provided any allocation for the reopening of the state-run jute mills which were closed down.

Ruhul Amin, a convener of the Workers-Peasants-Students-People Unity Council, said, "We have been demanding for a long time that the closed state jute mills be reopened. To this end, we have recommended an allocation of Tk1,200 crore. But the budget has not reflected our demand. We want the allocation for jute mill workers without delay. The closed jute mills also have to be reopened."

However, Sheikh Syed Ali, chairman of the Bangladesh Jute Association (BGA), said, "Our members export jute worth around Tk500 crore every year. The budget for the next financial year will be a boon for the jute industry."

He said the government is working to strengthen Bangladesh's position in the competitive international market highlighting the jute sector. "So, the jute trader applauds the proposed budget," he added.

Environmental activists

Environmental activists in Khulna have demanded to impose a 5% tariff on the plastic industry to help protect the environment from plastic pollution.

Gouranga Nandi, executive committee member, Pran and Prakriti Suraksha Mancha, Khulna, said, "In the 2018-19 FY, a 5% supplementary duty was imposed on all types of polythene and plastic bags. However, in the budget of 2022-23 FY, it has been proposed to reduce the duty."

He said, "Plastic and polythene are some of the most harmful materials for the environment. Their use should have been stopped immediately. We want the 5% supplementary duty on polythene and plastic bags to stay."

Meanwhile, Siam, a member organisation of the Bangladesh Anti-Tobacco Alliance, has claimed that the proposed budget will help the tobacco companies to create new smokers and encourage old smokers which would be harmful to both the environment and public health.

Advocate Masum Billah, executive director of Siam, said, "A nominal price increase without raising the tax rate at this level will increase the number of smokers in the country."

Political leaders

Leaders of different organisations of the ruling political party in Khulna hailed the proposed budget as people-oriented, meeting the basic needs of the country and the nation.

Khulna Metropolitan Awami League President and Khulna City Corporation (KCC) Mayor Talukder Abdul Khaleq said, "Targeting the vision of 2041 and 2031, the budget has taken into consideration the issue of increasing the living standard of the people. Education has been highly valued in the budget for the economic liberation of the people. Importance has also been given to the industrial and agricultural sectors."

He said, "If the country is industrialised, there will be massive employment for educated, skilled unemployed youth. It would help eradicate poverty from the country."

However, leaders of the BNP in Khulna said the proposed budget is not in the interest of the people.

Khulna Metropolitan BNP convener Shafiqul Alam Mona said, "It is doubtful whether the government will be able to implement such a big budget. The state of the country's economy is not good, there is no money in the bank. During this time such a big budget is nothing but over-ambitious."