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| :: Tk 1.1 lakh crore budget in the offing: No tax holiday, no rise of tax-free ~ |
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The Government is preparing a big size budget for the fiscal year 2009-10 which may be between Tk 1.10 lakh crore and 1.15 lakh crore while the revenue earnings target will be around Tk 80,000 crore, official sources said yesterday.
The current budget is Tk 99,962 crore which saw a big curtail due to poor implementation of this year's Annual Development Programme (ADP).
For the next budget the National Economic Council has already approved a Tk 30,500-crore ADP, which is Tk 4,900 crore more than the current ADP and Tk 7,500 crore higher than the revised one.
The ADP for the current fiscal year was Tk 25,600 crore. It has been curtailed to Tk 23,000 crore due to poor performance in implementation.
Finance Minister AMA Muhit earlier said that this time the budget would be a big one as global economic recession packages would have to be included in this year's outlay. Besides, the election pledges like expansion of social safety net and pay hike of civil servants would also be implemented through the budget.
Muhit on a different occasion hinted that this year he would give importance to direct tax instead of indirect one. He informed that he would take necessary steps to simplify the taxation procedure to encourage people to pay.
He also said he would try to bag taxes at least from the people having Tax Identification Number (TIN).
Muhit said he would continue the supports the previous governments provided for the sick industries but would not provide any more fresh incentives for those. He said there would have to be at least a minimum tax for a specified timeframe but no tax holiday facilities would be provided anymore.
Finance Ministry sources said the Government will not raise the tax-exempt income ceiling this year despite request from different quarters of the society. The present tax-free income ceiling is Tk 1,65,000.
Sources said, the Government would become very strict this time on tax measures apprehending that revenue earnings might fall next year due to reduction of import and export trade. The global economic meltdown has downsized both import and export, which has been caused due to the reduction of people's purchasing capacity.
The major revenue-earning sector of the Government is tax from car import, tobacco companies and cell phone operators. This time the Government will not reduce tax on SIM card of mobile phone but will reduce the tax on import of phone set.
This year the Government would not raise the supplementary duty on tobacco but raise the price level by 10 per cent. It was targeted to earn more revenue from the sector.
Meanwhile, experts have differed with the Finance Minister's stance on tax holiday saying that investors would have to provide tax facilities in other form if tax holiday was withdrawn in the upcoming budget.
Development partners were pressing the Government for withdrawal of tax holiday facilities for long time. Therefore, the Government is considering 'low tax' for new investment instead of the tax holiday system.
Former Bangladesh Bank Governor Dr Salehuddin Ahmed said tax holiday facility was being provided to the new investments to help those cope with the pressure they face at the primary stage. But in most cases the companies continue to enjoy the facilities even after the period they are entitled to.
Therefore, the Government can provide facilities in other forms like improve the investment climate and take measures to increase the production skill of the companies.
Supporting the Government's move to withdraw tax holiday facilities, he said tax holiday facilities create inequality among the companies.
Former Adviser of caretaker government Syed Manjur Elahi said withdrawal of tax holiday facilities may not have any effect on companies. He said the Government may accelerate depreciation in this regard, he said.
President of Bangladesh Textile Mills Association Abdul Hye Sarker advocated alternative facilities for investors if tax holiday was withdrawn. |
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