FBCCI calls for steps to spur investment
The government should reduce the interest rate on bank loans to encourage investment by private sector entrepreneurs in areas of energy and infrastructure, Kazi Akram Uddin Ahmed, president of the country’s apex trade body, said yesterday.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) president also called for lowering of the spread, which is the difference between the cost of fund and interest rate, to a tolerable 3 percent.
Businesses need to make a whopping 30 percent profit to cover the bank interest rate of 18 percent and the operating costs, according to entrepreneurs.
“The proposed budget for fiscal 2013-14 is not ambitious, but rather realistic. The only criticism we have is that the implementation of the budget would be challenging,” Ahmed said.
The FBCCI criticised the government’s decision to set bank borrowing at Tk 25,993 crore for the next fiscal year, up 13 percent from the outgoing fiscal year, to meet the budget deficit.
“The inflow of money to private sector will be squeezed because of government’s over-borrowing.”
“At the same time, we are urging the government to operate the state-owned industries under public-private partnership to reduce wastes.”
Ahmed suggested the government allow investment of black money in the industrial sector, infrastructure and in special economic zones to spur investment, while calling for stern actions to check the creation of black money.
Ahmed also welcomed the move to continue with tax breaks for 17 sectors which include garment, textile, tourism, IT, poultry and infrastructure.
The continuation of duty-exemption on import of basic commodities such as agricultural equipment, lifesaving essential drugs and cotton, together with the proposal to reduce duty to 2 percent from 3 percent on capital machinery imports, were also well-received by the business community.
The FBCCI lauded the proposal to increase the turnover tax ceiling to Tk 80 lakh from the existing Tk 70 lakh, which, Ahmed says, will help expand the businesses of small- and medium-scale entrepreneurs.
He also urged the government to making the proposed Alternative Dispute Resolution (ADR) more effective for resolving tax- and duty-related cases.
Bangladesh Chamber of Industries (BCI) said the targeted GDP growth of 7.2 percent might not be possible, given the current economic and political situations.
Although the reduction of taxes for the industrial sector will encourage industrialisation, the budget lacks proper guidelines to attract domestic and foreign direct investment, it said.
“The continued stance to extend amnesty to black money is not acceptable at all,” BCI said in a statement yesterday.
The chamber was also disappointed that the government did not target the finalisation of coal policy in the budget.
