Economist Zahid Hussain sees exports and corporate tax cuts as surprises in 2022-23 budget

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The existing tax rate for the export-oriented RMG sector is 12% for general factories and 10% for green factories.

In the next fiscal year budget announced on Thursday, Finance Minister AHM Mustafa Kamal introduced a tax rate of 12% for all other general industries exporting goods and services, and 10% for all other green industries exporting goods and services. goods and services.

The former chief economist of the World Bank in the Dhaka office identified cuts in the withholding tax on raw materials and the corporate tax rate of 2.5% as the other surprises of the draft budget.

He believes that cutting the corporate tax rate by 2.5% for three consecutive years has brought it down to a reasonable level and “will have a positive impact on investment”.

Pointing to the 23.82% increase in subsidies for electricity and fertilizers in the proposed budget, he said: “Without this, inflation would have increased further and put more pressure on the public.”

He stressed the importance of fertilizer subsidies. “We are worried about a possible global food crisis. Amid such anxiety, agricultural subsidies will certainly boost food production in the country.

Zahid criticized the lack of discussion on resolving the dollar crisis during the budget session.

Additional duties have been imposed on four products to reduce import expenditure, but these are mainly used by middle-income groups. Even if imports fall a little, inflation will rise, he said.

The government could have been strict in cutting current spending and cutting unnecessary spending to relieve pressure on imports and the dollar, he said.

“But I haven’t seen any measures to reduce this spending. All in all, it’s an incomplete budget filled with potential,” he said.

He thinks the implementation of the social support program will be difficult. “Allocation of 1,130,000,000,000 Tk [in the proposed budget] is huge, anyway, it’s only a 5% increase from the last budget.

Delivering this to beneficiaries without corruption and on time is and has always been a challenge, he said.

In his words, reaching the revenue target will be another big challenge. “The [draft budget] doesn’t do much in terms of moving to increase revenue, other than talking about tax filings.

The economist believes the budget lacks guidance on how to achieve the massive growth target.

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