'Budget should give attention to V-shaped recovery of economy'
How do the upcoming budget help the economy and businesses to survive?
The coronavirus pandemic has effects on both in several ways: supply chain disruption, cashflow problem, closure of businesses, feeble private investment, drastic fall of export earnings and remittance inflow, devastating impact on jobs, livelihoods and public health.
The government is preparing the national cover fiscal Year 2020-21 amid the pandemic. The budget should reinforce its give attention to a "V-shaped recovery" of the economy, mobilizing more resources for supporting cottage, micro, small and medium enterprise (CMSME) sector, infrastructure development and public health. Moreover, the next budget should have adequate fiscal and non-fiscal incentives for the manufacturing sector to create more employment.
What would the business enterprise community's three major demands for the national budget be?
The major demands from business persons in the upcoming budget will include a reduction of corporate tax rates for both listed and non-listed companies, imposition of VAT predicated on the value addition of product, rather than on the type of the business enterprise, and reduced amount of minimum corporate tax to 3% from 6%.
Can the budget help retain jobs in the professional sector?
To retain jobs in the professional sector, an investment friendly policy environment, improving the business environment, simplification of VAT return submission, corporate tax reduction and income tax waiver for whitening undisclosed money by investing in productive economic activities, monetary zones, jobs creation, real estate, health infrastructure and value-adding manufacturing sectors have to be ensured.
Do you consider the announced stimulus packages will help tackle Covid-19?
The Prime Minister has so far announced about 18 stimulus packages worth a lot more than Tk1 lakh crore to sustain the economy. It is a timely decision which can only help businesses. Export-oriented industries, especially the RMG sector, are already using the funds from the announced Tk 5000 crore because of this sector.
Do you also think the effects of coronavirus will hamper our prospects to become a middle-income country?
Bangladesh comes with an impressive track record of economic growth. However, the current focus of the federal government should be on an early recovery of business and the economy. Businesses need to be supported with short-term, midterm and permanent economic policy responses so that you can address the current economical disruption.
What budgetary measures are had a need to turn the SME industry around?
Due to Covid-19, SMEs have already been damaged with business closure, dried up cash flow, lower market access due to lower demand and longer procedure of VAT refund. To help the damaged SMEs with additional market access, we propose to supply protectionist measures like additional regulatory duty imposed against the products which local SMEs have expertise.
Meanwhile, to meet up the dire need of financing, special support must be allocated in the national cover SMEs under refinancing scheme where government scheduled banks could be engaged in disbursing loans and DCCI might provide support for it.
Similarly, we propose quarterly VAT return submissions for SMEs and refunding the decreasing adjustment of VAT and SD for 2 months instead of 9 months and making AIT at 3% until August 2020 and bringing it to 5% when business is stabilized.
Have you got any ideas on containing corruption in implementing the development budget?
Bangladesh is a country where the price tag on per km development work may be the highest on the planet. Strengthening the Monitoring and Evaluation department of the Planning Ministry can ensure a robust monitoring and evaluation of every development project. A year ago, the prime minister took stern actions against corruption. We want such strong political commitments against corruption to keep. Moreover, the institutional capacities of the various ministries and agencies must be improved to check on corrupt elements through the entire lifecycle of the projects.
The formation of a higher performing monitoring authority, COMMERCIAL INFRASTRUCTURE Development and Monitoring Advisory Authority (NIDMAA), with the participation of public and private sector representatives headed by the prime minister can help contain corruption in implementing the development budget. Besides, strengthening the Anti-Corruption Commission with the mandatory degree of autonomy can help contain corruption in the implementation of the development budget.
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