The proposed budget’s tax exemptions and corporate tax reduction are welcome moves for job creation but regulatory environment improvements and ease of doing business are also important to attract investment in manufacturing, said a webinar’s discussants.
The Ernst & Young Advisory Services Bangladesh organised the event on the budget.
Finance Minister AHM Mustata Kamal unveiled the Tk 603,680 crore budget, offering a 2.5 percentage point cut in the corporate tax rate for listed and non-listed companies.
He also proposed full tax exemption for eight manufacturing sectors for up to 10 years, including home appliances, fruits and vegetable processing, dairy and dairy product making and light engineering products.
Bangladesh was languishing at the 168th position in the 2020 ease of doing business ranking of World Bank Group, reminded Masud Khan, chairman of Unilever Consumer Care.
Private investment remains stagnant while an enabling environment is necessary to encourage investment which is highly needed to create more jobs as only 2.5 lakh of youths get employed out 22 lakh who join the workforce annually, said Prof Abu Eusuf of development studies at the University of Dhaka.
He said initiatives to address the issue of the “new poor” and entrepreneurs of small and medium businesses through fiscal measures were expected.
“We did not see that initiative. We now need to think beyond growth, beyond average,” said Eusuf, also director of the university’s Centre on Budget and Policy.
The event was moderated by Harish Agarwal, partner and location leader (Bangladesh) of the Ernst, while AKM Mahbubur Rahman, commissioner of Customs Bond Commissionerate, Chattogram, and Ruhul Amin, chief strategy officer of Robi Axiata, also spoke.
EY Partners, Tax & Regulatory Services Rakesh Saha, Dinesh Agarwal and Senior Manager Tax & Regulatory Services Momtaz Aziz Ahmed jointly shared a paper on the changes made in the indirect and direct taxes.