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FICCI raises concerns over proposed budget on certain issues

Published : Tuesday, 11 June, 2024 at 12:00 AM  Count : 373
Business Correspondent
The Foreign Investors Chamber of Commerce and Industry (FICCI) has expressed significant concerns over the proposed Tk.

7,97,000 crore national budget at a press conference titled "National Budget 2024-2025" held at a city hotel on Monday.
 
FICCI President Zaved Akhter highlighted key issues that the organization believes could adversely affect industries and overall economic growth. FICCI advisor Rupali Haque Chowdhury, Rubaba Dowla and other advisors were present in the meeting.

Akhter said increased taxes on telecom, carbonated beverages, and water purifiers would impose a heavy burden on these industries, potentially undermining their profitability and viability.

He warned that such measures could discourage foreign investment. Additionally, FICCI criticized the budgets lack of focus on financial sector reform, arguing necessary reforms are crucial to establishing a strong and resilient financial system.

FICCI also pointed out that despite government efforts to simplify the tax system, high effective tax rates (ETRs) remain a significant concern for businesses.

Another area of criticism was the disparity in taxation between the public and private sectors, with FICCI disapproving the governments decision to exempt public service funds from taxation while maintaining a 15 percent income tax rate for private funds.

The organization voiced apprehensions about the potential negative impact of removing incentives from private economic zones (EZs) and high-tech parks, suggesting that this could erode investor confidence.

Furthermore, the proposed increase in personal income tax rates was seen as potentially unfair by taxpayers and possibly discouraging compliance.

FICCI offered in the press conference several recommendations, including maintaining prospective tax rates and expanding the taxpayer base through innovative approaches.

Overall, FICCIs stance is that the proposed budget will not sufficiently promote business growth and investment while sounded critical about some of the tax measures.

However, FICCI appreciated the proposed national budget 2024-25, aimed at supporting the economy amidst challenges. With a budget size of Tk. 7,97,000 crore, constituting 14.2% of GDP, the government targets 6.75% GDP growth and 6.5% inflation for 2024-2025.

FICCI sees these targets as ambitious but achievable with an effective execution plan. The proposed reforms, especially in Income Tax and Customs aim to enhance revenue, reduce deficits, and enhance investor confidence.



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