Attaining revenue targets to be highly challenging in FY21: AmCham president
The upcoming national budget to be placed before parliament shortly needs to bring some changes in revenue targets unlike previous years to face the impact of coronavirus pandemic on the nation.
The government is already facing huge revenue shortfall and needs new measures to overcome the mismatch, President of American Chamber of Commerce (AmCham) Syed Ershad Ahmed said.
He told the Daily Observer ahead of the budget for 2020-21 that revenue collection to the level to meet the gap will be very challenging. Measures to overcome the shortfall may thus require a list of strategies including a cut in government expenditures.
Tax, import duty, supplementary duty and such measures may be required to recalibrate to increase revenue collection in one hand while the post-corona business lull may be a cause of setback to attain revenue targets.
He suggested raising wealth tax in different slabs in the next budget and at the same time tax free income ceiling may be raised to Tk 3.5 lakhs to help people to meet additional cost of daily life.
The AmCham president said currently wealth tax is 10 per cent of the tax amount. This is not fair and there is enough scope to move it upward.
"Wealth tax should be on wealth amount, because lots of wealthy people are not paying the due amount. As such my recommendation is that wealth tax should be exponentially on wealth slabs. Tax on a minimum of Tk50 million of wealth should be Tk50 thousand per Tk10 million, from Tk50 million to Tk100 million tax should be Tk100 thousands per 10 million and from above Tk100 millions it should be Tk150 thousands per Tk10 million."
The budget must allocate more funds to agriculture, health, social safety net and in job creation for growing unemployed people. "My recommendation is to invest 4 per cent of GDP to health sector and at least 3 per cent to agriculture," he said.
He said, the budget will face lot of challenges in the wake of big setback to domestic and international trade. On the back of the long lockdown exports sharply fell while inbound remittance also falls at record level. This will create a huge pressure on the government in implementing the budget for FY21 with big shortfall in revenue collection and slow down in foreign aid.
He suggested adequate allocation to prioritized sectors while spending on less prioritized sectors may be left to be addressed in the budget for 2021-22.
The new budget should also lay emphasis on helping small and medium enterprises and some infrastructural projects which will strengthen food production and maintain adequate food stock.
There should be enough allocation for rural job creation and loan at zero interest may be ensured to SMEs to boost production and income generating activities.
Import duty may be recalibrated to encourage local manufacturing and reduce import of luxury items to reduce pressure on foreign exchange when income from exports and remittances are on down turn.