Thursday, 20 June, 2024, Reg No- 06
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Budgetary support a must to accelerate business growth

Published : Wednesday, 22 March, 2023 at 12:00 AM  Count : 612

Budgetary support a must to accelerate business growth

Budgetary support a must to accelerate business growth

Bangladesh, like many other countries, is facing numerous problems due to global rising challenges in recent years, including the COVID-19 pandemic, climate change, and geopolitical tensions. In this context, the country's national budget can play a crucial role by addressing few challenges to foster economic growth.

Among few major changes, focus should be on invest in healthcare, prioritize climate change mitigation and adaptation, support cottage, micro and sub sectors (CMSME), improve digital infrastructure, promote foreign investments, reduce and withdraw few direct taxes and value added taxes to support domestic industrialization and enhance business and economic growth.

Like every year, many stake holders are giving proposals to the national board of revenue on different issues and many professionals are also giving their own ideas to the government. As an entrepreneur I do have some proposals on several issues aiming to speed up productions, encourage inward remittance and on resolving different complexities in land purchase and managements.

Among them I think personal income tax needs to be reduced to 15 per cent from existing 25 per cent. Currently Bangladesh adopts a progressive taxation rate on personal income (for resident with presence in Bangladesh: 1) for 182 days or more in one fiscal year or 2) for 90 days or more in one fiscal year 3) 365 days or more in preceding 4 years), which ranges from 0 per cent to 25 per cent (surcharge is payable by wealthy individuals).

On the other hand, local consultants who bring remittance at their consultancy services abroad bring remittance against their consultancy in favour of different companies need to pay value added tax and tax. Tax for the consultants should be reduced or should be treated as other wage earners who send foreign currency to the country. Currently they need to pay 10 per cent VAT & 26 per cent income tax. Due to this, good number of individuals are not bringing their money to the country as they need to pay higher tax against repatriated income. But if the government in the budget reduces such vat and tax the consultants will be happy and they will earn more and send more. Their earnings should be termed as remittance and should be treated as wage earns remittance.

Wealth tax/property taxes has soared manifolds. There are surcharge levied on wealth tax ranging from 10 to 30 percent in different slabs. Due to this high rate of surcharge in Bangladesh many investors are purchasing properties abroad instead of Bangladesh. In the coming budget, wealth/taxpayers property whose assets exceed Tk 50 crore should pay surcharge at 35 per cent rate.

Once it is done foreigner will also be inspired to invest on real estate as well as local investors. In the coming budget there should be special arrangements for fund to reduce gas system loss. In this digital world it is not expected that gas system loss and illegal use would cause serious problems for the industrial customers and households. Illegal lines are becoming legal despite cutting connection. Due to mismanagement in this sector, industrial customers and domestic legal connection holders are suffering and paying without getting gas. Government should deploy armed forces to curve this illegal use and system loss and restore transparency in gas distribution and transmission.

New techniques should be applied in power transmission system in the factories to reduce wastage of power. Currently a lot of power improvement and power saving equipments such as motor, inverter, energy tube light and lamps etc are available and Bangladeshi entrepreneurs can use them if import duty on these power savings equipment is nil for the sake of industrialization for saving energy. LED and other power factor savings equipment should be imported as duty free in the budget. Using energy-efficient products like LEDs.

Traditional incandescent and HID lamps produce a significant amount of waste heat. we can observe this simply by holding our hand on incandescent light source. The lamp gets warm because it's emitting a large portion of its electricity as wasted heat. LEDs, on the other hand, consume up to 80% less energy and are up to 90% more efficient. This saves our money in two ways: firstly, we will require less electricity to keep the lights on. Secondly, since LEDs radiate less heat, our air conditioning system won't have to work too hard.

If our industrial facility is outfitted with traditional light fixtures, converting or retrofitting to LED lights can provide huge energy and cost savings within one to two years. Another cause of waste heat is due to improper maintenance equipment. For example, motors often run hot due to insufficient lubrication, alignment issues and other problems.

For this reason, it's important to have a proactive maintenance strategy. Installation of condition-monitoring sensors  can be useful to detect when a machine is using more energy than usual and alert the user when repair is needed. We can also use predictive maintenance tools to anticipate when maintenance will be needed, which will give us time to plan for repairs.

Harmonic distortion in electrical system causes energy loss, and in some cases, overheating. To measure the total harmonic distortion present in a system, we shall use monitoring devices regularly. Once you have identified which machines are affected, you can make modifications to compensate for harmonics. Increasing the size of neutral conductors is a well-documented strategy for mitigating the effects of harmonics. We can also use separate neutral conductors for each phase conductor to increase the harmonic load capacity of three-phase branch circuits.

Variable frequency drives (VFDs) can bring us significant energy savings by controlling the amount of current supplied to an electric motor. Centrifugal equipment such as fans, pumps and compressors are prime candidates for VFD. According to the Compressed Air and Gas Institute, improperly maintained air compressors cause up to $3.2 billion in wasted energy costs annually in the United States.

But if we do not have an effective method for pinpointing leaks, improving the efficiency of our compressors can be like trying to find a needle in a haystack. This was the challenge that one of our customers faced.

So, one of our account managers introduced them to the Fluke ii900 Sonic Imager, a tool specifically designed to detect air and vacuum leaks. With the new imager, this customer was able to find at least 24 leaks - saving them $90,000 in energy costs annually.

The writer is chairman, Little Group and former director of Bangladesh Textile Mills Association

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