The Foreign Investors Chamber of Commerce and Industry (FICCI) has thanked Finance Minister Abul Hasan Muhammad Ali for presenting the National Budget for the financial year 2024-25 in the National Parliament on Thursday.

FICCI said it closely reviewed the National Budget announced today and appreciated the government’s efforts in preparing a comprehensive fiscal plan that would promote an enabling environment for business growth as well as address key economic challenges. deals with With a strong focus on controlling inflation, reducing aggregate demand, and boosting the supply side of the market, this budget lays a solid foundation for the stability of the economy.

The budget outlines several measures to control inflation and stabilize the economy, including tightening monetary policy by raising interest rates to 8.5 percent. The Standing Lending Facility (SLF) and Standing Deposit Facility (SDF) rates are fixed at 10% and 7% respectively to curb inflation by reducing money supply and encouraging savings. Additionally, substantial investment is aimed at increasing agricultural output by 20 percent and industrial output by 15 percent through technological advancements and infrastructure improvements. This is expected to balance supply and demand, thereby stabilizing the economy.

The Chamber appreciated the following proposals in the proposed budget. However, he said he believes there are some issues that should be addressed.

A prominent feature of this budget is its progressive business-friendly approach, which focuses on reducing costs for consumers. The emphasis on a predictable taxable system has been appreciated, meeting long-standing demands. The introduction of a prospective corporate tax rate enables accurate tax planning for businesses. The proposal to reduce the corporate tax rate from 27.5% to 25% for unlisted companies, subject to compliance with cash transaction conditions, is laudable. The proposed reduction in tax rates is expected to encourage private investment.

The budget reflects a progressive approach with a focus on tax reforms that simplify and clarify the tax system. This includes widening the tax base to 25%, introducing electronic financial instruments, and promoting e-payment systems to streamline tax collection and reduce costs. The number of taxpayers is expected to increase from 2 million to 2.5 million, creating a more business-friendly environment and ensuring greater predictability and transparency of the tax system. By increasing direct taxes and implementing the Electronic Tax Deduction at Source (ETDS) system, the budget aims to improve tax compliance and reduce evasion.

However, the budget lacks dedicated or specific directives for automation of tax, VAT and customs administration, which would increase efficiency and simplify the tax collection process. Absence of such reforms means VAT credit complications and potential financial pressures on businesses will persist. Continued reforms are necessary to ensure that the VAT process is streamlined, the administrative burden on businesses is reduced and compliance is encouraged, which will ultimately support economic growth.

Acknowledging the progress made in this budget, FCCI said it believes that higher allocations in health and education will further underline the government’s commitment to human capital development. The health sector was allocated 8% of the total budget while 12% was allocated to education. Better funding in these areas will support better health care services and educational opportunities, creating a more skilled and healthy population, which is essential for sustainable development. Experts believe that allocation of 10% for health and 15% for education would be more appropriate to meet the growing demands and ensure quality services.

Furthermore, allocation of resources for digitization of the National Board of Revenue (NBR) is imperative to enhance efficiency and transparency in tax administration. An investment of 500 million BDT has been earmarked for this purpose in digital infrastructure. This includes implementation of advanced data analytics, electronic tax filing system, and improved digital interface for taxpayers. This digital transformation is critical to achieving the budget’s revenue targets and supporting overall economic growth. It aims to increase the tax-to-GDP ratio from the current 8 percent to 10 percent in the next three years. -News for the newspaper-

Source link