A fresh stimulus bundle of at least Tk 20,000 crore is needed especially for the survival and revival of cottage and micro enterprises (CMEs) as those are most susceptible to the Covid-19 fallout, said Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
And at the same time, the disbursement of the Tk 23,000 crore fund designed for the cottage, micro, tiny and moderate enterprises (CMSMEs) ought to be completed at the earliest opportunity as a result that the afflicted units can resume functions, he said. "The proposed latest fund of Tk 20,000 crore will be limited to the CMEs and the banking institutions and other disbursement stations should be made informed for swift disbursal of the fund hence that they are able to enjoy the advantage during this time of crisis," Uddin as well said.
Some of the fund should be counted as grants for the CMEs, he said. Some 15 % of the CMSMEs in the united states have closed down and 50 % happen to be struggling to survive during this time period of crisis.
Uddin is scheduled to sit down in a getting together with with the chief executive officers (CEOs) of banks to go over the improvement of the disbursement of the stimulus funds among the CMSMEs.
Some 70 per cent of the money has been disbursed up to now from the first stimulus fund of Tk 23,000 crore for CMSMEs in more than one year.
The chief of the FBCCI also said the neighborhood business chambers and trade bodies can be used for disbursement of the fund as almost all of those units are registered with the local trade bodies.
The businesses will be greatly benefited from the organization tax cut of 2.5 % across the board, Jashim Uddin told The Daily Star over the telephone.
Even so, the FBCCI demanded withdrawal of the 5 % Advanced Income Tax (AIT) and 4 per cent VAT. The financing minister did not withdraw these and thus business operation costs increase, he said.
Although the organization tax cut at 2.5 per cent will have a positive impact on the revival of the firms, the AIT and VAT will stay a burden, he explained.
Some native industries will grow due to the tax visit to the proposed budget while various other sectors will face difficulties, he said.
For instance, even 2 yrs ago the import of dredging machinery used to take pleasure from 1 % duty since it was counted as capital machinery.
However, since this past year the government imposed 31 % duty about import of dredging machinery although it is capital machinery and very vital to excavating rivers.
Many individual companies have been involved in importing dredgers to excavate the rivers to make sure water flow.
Uddin said not a one dredger was imported this past year as a result of high import duty and the federal government kept the 31 per cent import duty found in the proposed cover fiscal 2021-22.
The government includes a target to improve the private investment and GDP ratio to 25 per cent from 23 % in the proposed budget by bettering the business environment during the pandemic.
It would come to be a bit difficult to achieve the target simply with some tax benefits to business and if the federal government wants to achieve the prospective of 25 %, it needs to do even more, he said.
Uddin is expecting more expenditure from both domestic and foreign business owners with a give attention to electronic goods and kitchen appliances as a lot of benefits have already been provided to them found in the proposed budget.