Political instability a risk for budget: Asif Ibrahim
Reported by: UNBconnect
Reported on: Jun 12, 2012 05:50 pm
Reported in: Business
Dhaka, June 12 (UNB) – Demanding reconsideration of some budget proposals, Dhaka Chamber of Commerce and Industry (DCCI) President Asif Ibrahim on Tuesday feared that the possible political instability might put budget implementation at risk.
“I think, we all should determine the future directives giving top priority to political stability,” he told a press conference at the DCCI conference room.
The Chamber president identified three basic challenges that are shortage of energy, infrastructure and availability of credit with affordable interest rate for the smooth investment in the private sector.
The DCCI arranged the press conference to give its official reaction over the proposed budget for fiscal 2012-2013. The DCCI directors were also present.
Asif Ibrahim said the proposed budget does not have any short-term plan to increase domestic and foreign investment despite having some specific directives or policies to expand business.
Responding to a question on black money whitening, he said, “Investment is very important. It’s better to have some terms and condition regarding investment of undisclosed money.”
“So”, Asif said, “If anybody says he’ll create employment opportunities for at least 500 people only in that case undisclosed money investment can be allowed at 10 percent tax or with penalty.”
Replying to another question, he said tax net will have to be expanded to give a boost to revenue generation. “The number of 30 lakh TIN (tax identification number) holders is too small in a country of about 16 crore people.”
He suggested increasing the tax-free income limit at individual level from the proposed Tk 1.80 to Tk 2.50 lakh considering the price hike of essentials and soaring inflation.
On budget deficit, which is 5 percent of the GDP (gross domestic product), Ibrahim said the production will be hampered if the government borrows money from the banking sector to address the budget deficit like the outgoing fiscal. “It’s a big challenge for the coming budget.”
He said the proposed hike of tax at source (1.2 pc) on all types of export items will be a big challenge and the net impact on the RMG exporters will be 6 percent since the government has formulated new wage structure for the workers.
He demanded specific policy support, infrastructure development, and gas and electricity connection to the industrial units and easy access to required credit for the investment.
The chamber identified 17 positive sides of the proposed budget against 16 negative proposals and placed 26 recommendations related to policy, income tax, VAT (value added tax) and import for the government’s reconsideration.
The DCCI president said the entrepreneurs expect a commitment from the government regarding investment surety, continuity and consistency of policies.