Exporters unhappy with proposed budget 2013

EAB demands cut in tax at source on export proceeds

. Kazi Zahidul Hasan
Exporters Association of Bangladesh (EAB), the country's apex body for export sector, has expressed its disappointment over the proposed budget saying that the proposed hike in tax at source on export proceeds will hit export business.
Finance Minister AMA Muhith in his budget speech proposed raising tax at source on exports to 1.2 per cent from the current 0.60 per cent.
"When the export sector is passing through a critical time influenced largely by the global crisis coupled with various internal factors, the budget 2012-13 announced yesterday proposed a hike in tax at source to 1.2 per cent. This will hit the country's export business and reduce growth," Abdus Salam Murshedy, President of EAB told The New Nation on Friday.
The entire industry is going to face the brunt of this tax hike and it would impact the total profitability too, he said.
EAB president said the garment sector has been facing very tough situation due to debt crisis in its major markets in EU and economic meltdown in the USA. This tax hike will add an extra burden to the exporters," Murshedy added.
Murshedy pointed out that growth of export sector has been showing down trends since long due to falling global demand when the industry faced troubles due to energy and power crisis and high rate of interest.
"Repeated hike in fuel and power prices has raised the cost of production significantly in export-oriented industries. In such a situation, a hike in tax at source is irrational and unbearable for us," he said.
Considering adverse impact on the industry, Murshedy, however, urged the government to reconsider the budgetary provision and cut tax on export proceeds.
He said the industry needs immediate policy support to offset adverse impact of the global meltdown. At the same time, the government must ensure uninterrupted power supply to the industrial units so that production remains unhurt.
The EAB leader also opposed the government plans to increase bank borrowings for the next fiscal year.
Muhith in his budget speech Thursday also proposed to increase in bank borrowings by the government to Tk 23,000 crore from Tk 18,957 crore for fiscal 2012-13.
"A higher bank borrowing by the government will create a liquidity crunch making private sector credit costly," he said adding that credit crunch will definitely hurt the private sector investment and thus will slow down industrial growth," he feared.
While giving observation on the proposed budget, he said the national budget for the next fiscal appeared to be challenging.
"Implementation and revenue mobilization will be the key challenge for the government because the budget has been set a huge development expenditure as well as revenue collection target," he said.
Responding to a question on giving further amnesty to black money, Murshedy said, "We do not support this provision as it is an injustice for the genuine tax payers."

20 June, 2013 Thursday

Exporters unhappy with proposed budget 2013

EAB demands cut in tax at source on export proceeds