Muhith hints at Tk 100,000cr budget next fiscal

Tax holiday to go gradually
Finance Minister AMA Muhith yesterday unveiled the government’s plan to gradually scrap the tax holiday for the benefit for various sectors.
Addressing the pre-budget consultation meeting organised by the Metropolitan Chamber of Commerce and Industry (MCCI), the finance minister said that the sectors that had been awarded tax holiday for certain periods would continue to enjoy it until their terms expire. “But they have to pay low tax,” he added.
The minister also said that the size of the next budget would be around TK 100,000 crore.
Considering the multidimensional requirement in the wake of the global financial crisis such a big budget was essential to attain the desired growth, he added.
Muhith said the government would keep an option in this year’s budget too to legalise undisclosed money to invest in some sector, the housing in particular.
The government was planning to amend the laws relating to tax, customs and value added tax (VAT).
The minister could not give the figure of the money legalised over the last few years.
In the next national budget, he said, the government would prioritise energy sector and put emphasis on special economic zone.
UNB adds:  “I sincerely believe that the budgetary targets are achievable. But, there are two challenges,” AMA Muhith said. “We need a climate of (business) confidence and that there must not be violent differences…”
His concerns came in the wake of the human-chain the main opposition BNP staged across the country just an hour before he spoke at the pre-budget meeting at the MCCI.
Muhith said the opposition, although having a small representation in parliament, will have enough time to raise their points and the situation will also prevail in the coming budget session. “The violent nature of politics would not help achieve the budgetary goals.”
 “I should be able to announce something in the budget relating to energy and power,” he said, adding that the energy situation is the Achilles heel of development.
He said the government is going to permit dual-fuel as well as coal-fired power generation plants while undertake power transmission project. The budget would have a 5-year plan on the power sector.
Muhith said his idea about tax holiday is to abolish all together with effect from 2011 and impose a minimum tax on corporate income to ensure accountability. He said the existing facilities given by the previous governments would continue till then.
About reduction in corporate tax on banks and financial institutions, he said: “We’ll see… I can’t say.”
In response to a demand for a stable tax regime, he said it is his dream to introduce a stable tax regime for five years. “But, it’s not possible to start this year.”
The minister refrained from supporting the idea of allowing investment abroad from the next fiscal year due to the recession, but would consider it case-to-case basis from the following year.
He also dismissed the idea of privatisation next year due to the recession and made it clear that “it does not mean that privatisation won’t take place in the following years.”
In response to another idea of exporting surplus rice to prove that the country can turn around, he said, “This is something we cannot touch upon.”
On the much-talked-about undisclosed money, he said if the budget allows some quarter, it’ll remain tightly limited to some specific sectors.
Speaking at the meeting, Muhith said the government is not changing the list of SOEs identified for offloading shares in the capital market. They would start moving with the list after solving the problem over releasing the shares of GrameenPhone first.
MCCI president Abdul Hafiz Chowdhury put forward a pre-budget recommendation, including their strong position against allowing the undisclosed money, while trade body leaders and leading entrepreneurs were present at the meeting.
They sought fiscal monetary and tariff policy supports in the next budget to face off the multidimensional crisis what they think is bound to affect the country.
The chamber sought support for the manufacturing sector in a manner that would get equal the importance with the agriculture and rural economic sectors.
“The private sector is the engine of growth,” the Finance Minister told the meeting, giving hints about the budgetary measures he is going to announce next month on few issues the business community raised at the meeting.
 
Courtesy of The Independent