Tax support needed for job recovery
Restructure of corporate tax, improvement in the position of the Simple Doing Business Index, and special allocation for SMEs should get concern in the upcoming spending plan to draw purchase and revive the job market, companies and economists say.
The economy is certainly recovering towards the pre-pandemic levels, nonetheless it is still nearly there particularly with regards to returns to employment. This is one essential finding from the most recent employment study of the South Asian Network on Economic Modeling (Sanem).
The other key finding may be the uneven distribution of recovery across sectors and types of employment.
The self-employed in transport, hotels and restaurants, and making have recovered minimal, while the wage employed have recovered relatively better.
Around 7.8 % of wage staff members in different sectors who misplaced their job are still unemployed, the Sanem stated.
"Employment generation have to ascend in the concern list of the budget for the fiscal time of 2021-22," said Zahid Hussain, a ex - lead economist of the Globe Bank's Dhaka office.
"Both expenditure and tax policies will have to be reoriented to target more on augmenting prospects for the unemployed and the underpaid self-employment."
Abul Kasem Khan, chairperson of the Business Initiative Leading Production, said the federal government should emphasise bettering the country's ranking on the Ease of CONDUCTING BUSINESS Index to pull investment that will head to job creation.
"The world hasn't faced this sort of economic struggle over the last a hundred years. So, the federal government should adopt incredible policies for another three years that would benefit the economy."
The former president of the Dhaka Chamber of Commerce and Industry said businesses didn't expand as the persons and businesspeople concentrated more on savings due to the uncertainty.
"Consumers don't spend cash when they are in a keeping mode, and businesses don't expand. That is why, the federal government should introduce incentives for intake and improve the rank in the Simple CONDUCTING BUSINESS Index to recreate vibrancy to the market," Khan said.
He called for reducing corporate tax and emphasising job creation giving tax incentives to the investors who'll create employment opportunities.
Small and medium enterprises (SMEs) were damaged severely through the pandemic, as revenue dropped sharply. The sector has had no access to finance.
Khan suggested the federal government make a special allocation for the sector to ensure their access to finance to generate a comeback.
In Bangladesh, there are nearly 7.9 million SMEs, incorporating micro-enterprises contributing 25 % to gross domestic merchandise (GDP), in line with the Asian Development Bank.
SMEs take into account 11 % of the country's professional establishments, 30 % of professional employment, and 40 % of the manufacturing productivity, showed the Economic Census 2013.
Rizwanul Islam, a past unique adviser for the employment sector at the International Labour Workplace in Geneva, said numerous surveys express that incomes of huge amounts of people, especially on the low-income category, were still good below their pre-pandemic levels.
"This indicates that the employment problem has also not recovered fully."
He said the overall economy was confronted with the dual problem of time for the pre-crisis growth path as well as that of getting on track for appointment the Sustainable Development Objective targets of whole and productive work and decent function for all, and lessening inequality.
"Given the urgency of the situation, some random measures of salary support for the poor, such as direct money transfer that was attempted this past year, ought to be continued - of lessons with necessary improvements."
Islam needed expanding direct employment technology programmes.
He also suggested allocations for economic support programmes for small and micro enterprises and locating non-bank alternatives for reaching focus on beneficiaries found in this category within the next budget.
Kamran T Rahman, president of the Bangladesh Employers' Federation, suggested the federal government provide stimulus deals to all entrepreneurs within the next budget to ensure that they could create careers.
The rules on the disbursement of the stimulus packages ought to be made easier in order that all entrepreneurs can access the funds. And the repayment period should be extended, he said.
Sayema Haque Bidisha, study director of the Sanem, recommended job creation found in urban areas.
Razequzzaman Ratan, president of the Socialist Labour Front side, said the pandemic damaged informal sector personnel. And those who job in the informal sector would deal with foodstuff shortage and malnutrition.
So, the federal government should allocate Tk 5,000 crore to introduce a rationing system found in the budget to supply meals assistance to the brand new poor.
Zahid Hussain said various micro, cottage and little industries had remained excluded from the subsidised credit rating packages as a result of their inability to access the banking system.
The government has built some mid-course corrections that rely on alternative institutional mechanisms.
"We don't have much information how these have fared. If indeed they have met goals, then the programmes being implemented must be strengthened," Hussain said.
Taxation policies have to eradicate provisions that discriminate against small players, he said.
"Reforms in VAT happen to be needed in order that the cottage, micro and small enterprises are reintegrated found in the supply chain feeding the channel and large enterprises."
In line with the economist, company tax structures demand simplification with techniques that will encourage productive investments.
"The federal government must move away from random tax policy adjustments towards a predictable taxation regime to create taxation trade- and investment-friendly."
