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Tackling inflation to protect people’s purchasing power key challenge: DCCI
Enhancing private sector investment, employment generation, revenue shortfall and financing are some of the challenges of the proposed budget for FY2022-23.
In order to attain the targeted GDP, government needs to focus on widening tax net gradually, automation of tax structure, fixing up rational target of revenue collection and consistency of government expenditure.
President of Dhaka Chamber of Commerce & Industry (DCCI) Rizwan Rahman said these in his initial reaction on proposed budget for FY2022-23 on 09 June 2022 at the DCCI Building.
The inconsistency between income and expenditure in the proposed budget may lead to dependency over bank borrowing or loan from foreign source.
Dhaka Chamber thinks that a planned, timely, cost efficient and implementable budget is more effective than a big budget.
Read: $ 80 billion planned for investment by 2030 to achieve climate resilience
Since the middle and lower middle income group of the society are facing the pressure of inflation, taking it into consideration, the limit of individual income tax can be increased. However, few slabs can be created for the higher income level group but obviously in a rational manner.
Listed companies offloading more than 10% of their paid-up capital to the market through IPO only can avail the opportunity of giving 20% corporate tax.
And both listed and non-listed companies who have cash expenditure or investment of taka 12 lakh annually and if they do transactions through banking channel are eligible to give 20% corporate tax.
If any listed company fails to comply with these two conditions, they will have to pay 25% corporate tax. Dhaka Chamber feels that the threshold or limit in these conditions are very insignificant.
Moreover, corporate tax rate should be reduced to be more competitive not only in the international market but also in local market.
This year from July to May our export earning was USD 47.17 billion against import expenditure of USD 68.87 billion.
Read: Govt raises bus fares on 13 routes adding Padma Bridge toll
Trade deficit is USD 21.7 billion. It seems that our import expenditure is higher than the export earnings. Import expenditure over export earning is not good for our international trade.
"We need to promote export diversification. Equal corporate tax for RMG and non-RMG export sector will facilitate diversification process. 24.9% investment from the private sector is targeted. But for that, private sector credit flow should be increased."
ADP implementation till May 2022 was 58.36% which is not satisfactory.
Mega infrastructure projects should be completed at a faster pace but in a lower price ensuring transparency and accountability.
Clause number 83, 84 and 100 of goods seize provision need to be reformed, Rizwan Rahman said.
Budget 2022-23: Home Ministry gets Tk 1893 more to spend than current fiscal
An amount of Tk 28,781 crore has been proposed for the Public Security and Security Service divisions under the Home Ministry in the proposed budget for fiscal year 2022-23, up by Tk 1893 crore, from the outgoing fiscal year 2021-22.
Finance Minister AHM Mustafa Kamal announced the proposed budget while addressing budget speech in the National Parliament today (Thursday).
Of the total allocation, Tk 24,594 crore has been allocated for the Public Security division, while the remaining Tk 4,187 crore for the Security Service division.
These allocations include important state agencies providing security and emergency services such as the police, the Fire Service, etc.
Budget FY23: Prices to go up and down
Finance Minister AHM Mustafa Kamal on Thursday placed the proposed national budget for 2022-23 fiscal year, changing VAT and duties on different products, which would lead the fluctuation in the prices of some goods and services.
Prices up:
The products and services which would be costlier include - Mobile phone sets, Covid-19 test kits, hand sanitizer and PPE, first class railway services in addition to air-conditioned services, meditation services, tobacco products, computer printers, paper cup, plate and bowl, cheese and curd, imported birds of prey, imported ostriches and emus, imported mobile and other battery chargers, cash register, imported laptop and water purifying machine.
Price down:
The goods which would be cheaper include locally made refrigerators and freezers, locally made motor car and vehicles up to 2500 CC, sugar, puffed rice, wheel chair and cashew nut.
Read: $ 80 billion planned for investment by 2030 to achieve climate resilience
Govt raises bus fares on 13 routes adding Padma Bridge toll
The government has raised the bus fares on 13 routes adding the toll fixed for crossing the Padma Multipurpose Bridge to go to different south-western districts.
Bangladesh Road Transport Authority (BRTA) issued a notification in this regard signed by its director (Engineering) Sitangshu Biswas on Tuesday.
Citing the BRTA’s notification issued on May 17, it said the fare has been revised 40-seat (excluding driver) bus instead of 51-seat after adding toll of Padma Bridge.
Also read: Padma Bridge to lead to unprecedented improvement in communication system: Kamal
According to the notification, the bus fare on Dhaka-Bhanga-Madaripur-Barishal route has been fixed at Tk 412. Apart from this, the fare on Dhaka-Rajoir-Gopalganj route is Tk 504 while on Dhaka-Gopalganj-Khulna at Tk 649, Dhaka-Jajira-Shariatpur route Tk 218, on Dhaka-Barishal-Pirojpur Tk 534, on Dhaka-Gopalganj-Bagerhat-Pirojpur Tk 628, on Dhaka-Barishal-Patuakhali Tk 501 and on Dhaka-Bhanga-Madaripur Tk 327.
Besides, the fare on Dhaka-Gopalganj-Khulna-Satkhira is Tk 633 while Tk 288 on Dhaka-Bhanga-Faridpur, Tk 653 on Dhaka-Madaripur-Barishal-Bhola-Char Fashion, Tk 219 on Dhaka- Buriganga second bridge-Shariatpur, and Tk 694 on Dhaka-Madaripur-Barishal-Patuakhali-Kuakata.
This new rate will come into effect after the inauguration of the bridge.
Prime Minister Sheikh Hasina will inaugurate Padma Bridge on June 25, Road Transport and Bridges Minister Obaidul Quader said on May 25.
Bridges Authority has, meanwhile, said that the revised cost of the ambitious Padma Bridge project is Tk 30,193.39 crore.
Budget 2022-2023: Govt allocates Tk 637 crore for Cultural Affairs Ministry
In the proposed budget for the next 2022-23 financial year, Finance Minister AHM Mustafa Kamal on Thursday has proposed an allocation of Tk 637 crore for the Ministry of Cultural Affairs.
The proposed allocation is Tk 58 crore more than the revised budget of the last financial year.
In his budget speech, the Finance Minister said the government was working for the preservation of non-communal democratic heritage of Bengali culture and for the creative development of national language, literature, art, music, drama and other fine arts.
Also read:Government allocate Tk 1,282 for Youth and Sports Ministry in FY 2022-23
Development of indigenous culture and cultural heritage, liberation war consciousness and research, display and exhibition, publication, identification-excavation-renovation-preservation and display of archeological specimens, copyright preservation of creative works, celebration of historic 7th March Regular funds are being allocated.
Financial assistance is being provided to cultural activists and cultural institutions every financial year, he said in his budget speech.
Through the application of information technology, digital preservation and management of films has been introduced in place of traditional methods, he added.
Defence budget increased by 7.1 pc
The allocation for the Defence Ministry in the proposed budget for fiscal year 2022-23, has been increased by Tk 2669 crore, a 7.1 percent increase, from that of the outgoing fiscal 2021-22.
Tk 40,360 crore has been proposed for the Defence Ministry and other services under the ministry in the national budget for the 2022-23 fiscal year.
Read: Budget FY23: Education allocation to rise by less than 2 pc of GDP
An amount of Tk 37691 crore was proposed for the Defence Ministry and other service under the ministry in the national budget for the 2021-22 fiscal year.
Finance Minister AHM Mustafa Kamal made the announcement during his budget speech at the National Parliament Bhaban on Thursday.
Besides, he also proposed Tk 45 crore for Armed Forces Division which was almost unchanged from the outgoing fiscal’s budget.
$ 80 billion planned for investment by 2030 to achieve climate resilience
Finance Minister AHM Mustafa Kamal has said that US$ 80 billion is being planned for investment by 2030 to achieve climate resilience.
Presenting his plan in parliament in his budget speech on Thursday, he said the government is going to implement the ‘Mujib Climate Prosperity Plan’, which is essentially a strategic investment framework for climate financing to move from climate risk to sustainable climate prosperity.
The investment will be funded by both domestic and external sources, he added.
He said that considering the immense importance of environmental protection, the government has made it mandatory to follow a pragmatic and inclusive environment-friendly plan in all development activities while addressing the risks of climate change.
As part of the implementation of the global carbon emissions reduction target, the country’s updated ‘Nationally Determined Contribution’ was finalised in August 2021.
By 2030, the target of reducing carbon-dioxide emissions has been set at 6.73 percent with the country’s own financing and technological capabilities.
Also read: Budget FY23: Tk5,000 crore earmarked to combat pandemic
Another 15.12 percent of this emission reduction has been provisioned subject to the availability of international funding and technical assistance.
On the other hand, the process of formulating a ‘National Adaptation Plan’ to determine the long-term integrated adaptation strategy together with an action plan to tackle the country’s climate change is at the final stage.
He said the updating of ‘Bangladesh Climate Change Strategy and Action Plan’ formulated in 2009 is in progress.
In addition, steps have been taken to make all existing industries and newly established industries environment friendly.
Following this, new decisions have already been taken on installation of 10 coal-fired power plants worth 12 billion USD with the generation capacity of 8,600 MW.
Of these plants 4 have been canceled and the remaining 6 will be renewable or gas-based, on the basis of a feasibility study. We are working on ensuring availability of 40 percent of our energy resources from renewable sources by 2041.
So far, 13 areas of the country have been declared as Environmentally Critical Areas on the basis of the finding of scientific studies aimed at conserving biodiversity and the natural environment, said the finance minister.
In the last 13 years, a total of 35 new protected areas have been created, including 9 National Parks, 18 Wildlife Sanctuaries, 3 Eco-parks, 1 Botanical Garden, 2 Marine Protected Areas, and 2 Special Biodiversity Conservation Areas, bringing the total number of protected areas in the country to 51, said the financial minister.
Government allocate Tk 1,282 for Youth and Sports Ministry in FY 2022-23
The Government has allocated Taka 1,282 crore for the Youth and Sports Ministry in the proposed annual budget for the 2022-23 fiscal, little-changed from the amount in the outgoing 2021-22 fiscal’s revised budget of Tk 1,264 crore.
Of the proposed allocation of Tk 1,282 for the next financial year, Tk 876 crore shown as operating cost and Tk 406 crore shown as development expenses.
The budget allocation for the 2021-22 fiscal was Tk 1,122 crore, which was later raised to Tk 1,264 crore in the revised budget, which is a rare occurrence since allocations are usually revised downwards.
Also read: Budget FY23: Laundered money to be legalized by 7-15 pc tax
In a budget speech at the Jatiya Sangsad on Thursday (June 9), Finance Minister AHM Mustafa Kamal said the government has been constructing and developing various sports infrastructures including modern stadiums, gymnasiums, and swimming pools, with the aim of improving the quality of sports and augmenting sporting and athletic opportunities.
There are 8 (eight) ongoing projects in Fiscal Year 2021-22 for construction and development of sports infrastructure, one of which is the construction of Sheikh Russell Mini Stadium as an Upazila Level project.
Side by side, the government seeks to invest in training for the players by skilled and experienced coaches with the aim of producing skilled players, improving the quality of rural sports and provision of long term trainings for talented players, selected through talent hunts).
In addition, regular financial grants and sports equipment are being allocated to various sports federations/associations/organizations for organizing sports events and participation in domestic and international sports events. The Sheikh Kamal National Sports Council Award has been introduced to promote the sports, which is being awarded to the eminent athletes/organisers.
Universal Pension Scheme from new fiscal year
Finance Minister AHM Mustafa Kamal has announced his plan to introduce a Universal Pension Scheme in the country from the new fiscal year (2022-23).
“After passing through all necessary formalities, it will be possible to present this important draft law to Parliament by 2022- Inshallah, “he said.
He mentioned that the implementation of the universal pension scheme will bring a large number of citizens from both the formal and informal sectors under the institutional social safety net.
“Consequently, there will be an opportunity to gradually scale down the existing social security programmes,” he added.
He said that it is high time to establish a universal pension system in Bangladesh as at present the number of working people is much higher than the elderly population.
Under various programmes for social protection of the elderly and needy communities, the government is providing allowances to about 1.15 crore beneficiaries.
Bearing in mind, the government’s election pledge, a policy decision has been taken to enact the ‘Universal Pension Management Act, 2022’ to introduce a universal pension system to ensure a sustainable social safety net for the elderly and the needy people.
In the 2008 election manifesto, he said Prime Minister Sheikh Hasina promised to introduce a universal pension scheme nationally to ensure old-age protection for the elderly citizens under a sustainable and well-organised social security framework.
Accordingly, the government, in its 2015 ‘National Social Security Strategy’, proposed the creation of a comprehensive, integrated and participatory pension scheme.
The budget speech for FY2019-2020, establishment of the universal pension scheme was outlined.
Now, he said the government has decided to introduce a universal pension system from the next fiscal year.
He said around 85 percent workforce of Bangladesh’s labour market is employed in the informal sector.
As there is no institutional social security framework for the informal sector and expatriate workers, there are chances of uncertainty of livelihood at their old age.
Budget FY23: Laundered money to be legalized by 7-15 pc tax
The government has introduced a policy of legalizing laundered cash and assets without facing any questions for a year starting from next July 01. Finance Minister AHM Mustafa Kamal in his budget speech said Covid-19 pandemic and the ongoing unstable condition in certain parts of the world forebode a recession in the global economy. “Under the circumstances, we might have to face tough challenges in the coming fiscal year. As such, we have to be more prudent and visionary in adopting and implementing fiscal policy,” he said.
He said, “To keep the economy going, we have to arrange for more revenue for the government expenses on one hand, and also have to make the economic activities in the private sector more vibrant and dynamic on the other”. This is why he said he proposed to add a new provision in the Income Tax Ordinance, 1984 so that money earned and assets acquired abroad can be mainstreamed into the economy with a view to creating a flow of fresh funds and investment for economic activities. According to the proposed provision, no authority, including the income tax authority, shall raise any question as to the source of any asset located abroad if a taxpayer pays tax on such asset. The proposed rate is 15 per cent for immovable property not repatriated to Bangladesh, 10 per cent for movable property not repatriated to Bangladesh and 7 per cent for cash and cash equivalents repatriated to Bangladesh. This opportunity will be in force for the period starting from the first day of July 2022 and ending on the thirtieth day of June 2023, Kamal said in the speech. The minister hoped that this provision will increase the flow of foreign currency to the economy, increase income tax revenue, and the taxpayers will also feel relieved by availing this opportunity to declare their assets and money acquired/earned abroad in their respective income tax returns.