Tax holiday to go: Muhith

MCCI speaks against govt plan for money-whitening provision in next budget

Finance Minister AMA Muhith yesterday said the next budget would not have the provision of tax holiday for any sector.

Sectors that are now enjoying the facility will not lose it until it expires but they will have to pay a low tax from the next fiscal year, he said.

“We must make the sectors that enjoy tax holiday facility more accountable. This is why I will not further extend the facility to any sector in the next budget,” Muhith said at a pre-budget discussion at the office of the Metropolitan Chamber of Commerce and Industry (MCCI).

Hinting at allowing investment of undisclosed money in some selected sectors, including housing, he said he would amend the acts of tax, customs and VAT in the upcoming national budget for the 2009-10 fiscal year.

He said the option for investment in a foreign country by a local entrepreneur would not be allowed in the next budget; the government may consider allowing this from 2011 onwards.

The minister said he would try to increase public spending through budgetary measures to generate employment particularly in rural areas.

He further said he would not privatise anymore state-owned enterprises in 2009-10 fiscal year but the process of such privatisation would be resumed later.

In the next budget the government will allow setting up of dual-fuel power plants and coal-based power plants and encourage setting up of captive power plants as solving the existing power and energy crises is his top priority.

Terming power transmission “horrible”, he said power generation is not a problem to him.

As a commitment for strengthening the stock market, Muhith said he would offload shares of the state-owned Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha in the capital market.

“We will strengthen the Securities and Exchange Commission further to ensure a vibrant stock market. We have a plan to offload shares of many more government-owned companies in the stock market,” he said.

Criticising the present bureaucracy as extremely inefficient and rampant with corruption, Muhith urged public servants to be more people oriented.

Mentioning the chamber’s opposition to allowing whitening of undisclosed money, former MCCI chief Latifur Rahman suggested that the government give more allocation to the agriculture sector since this sector still generates most employment.

“The government should allow local entrepreneurs to invest in foreign land at least regionally,” he said.

Another former MCCI president Samson H Chowdhury urged the government to stop harassment in payment of taxes.

MCCI President Abdul Hafiz Chaudhury said commercial banks would face handicaps in mobilising deposits due to higher interest rate of the National Savings Schemes.

The government must give higher priority to containment of its non-productive expenditures, Hafiz said, urging the government to increase salaries of government employees for getting better service.

“Another issue relating to monetary policy that needs to be given high priority in the next budget is increasing government borrowing from the banking sector. The government’s borrowings increased from Tk 36,230 crore in 2006 to Tk 43,348 crore in 2007 and Tk 53,458 crore in 2008 and is projected to increase significantly in 2009,” Hafiz said.

The MCCI chief proposed reducing corporate tax and tax treatment of insurance companies, banks and other financial institutions.

“The draft Industrial Policy 2009, which has been finalised, has serious contradictions, which will cause setback to the process of industrialisation,” Hafiz said.

Mahbubur Rahman, president of International Chamber of Commerce and Industry-Bangladesh, Amjad Khan Chowdhury, chief executive officer of Pran-RFL Group, and Anis A Khan, managing director of Mutual Trust Bank, among others, spoke at the discussion.

Source: The Daily Star, 15 May 2009


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