Proposed budget bears a huge deficit of Tk 2450 billion: Speakers

Speakers at a budget discussion have said the proposed budget of 2022-23 bears a huge deficit of Tk 2450 billion.

They also said that achieving this budget would pose tremendous pressure on the government considering the challenges posed by Covid-19 situation, effects of Russia-Ukraine conflict and the big burden of Rohingya refugees in the country.

The speakers made the observations at a discussion session on Budget 2022-23 which is organised by Institute of Chartered Secretaries of Bangladesh (ICSB) recently at the Hotel Sheraton of Banani in Dhaka.

The programme was chaired by Md Azizur Rahman, senior vice president of ICSB; Md Shafiqul Alam, chairman of Seminar and Conference Sub Committee and council member of ICSB; gave the overview of National Budget 2022-23.

It was attended by a good number of former and current government officials, corporate leaders, economic sector specialists, heads of professional institutes and associations and dignitaries.

In the session, the speakers mentioned that the proposed budget in some cases may have negative affect the individual category taxpayers. Panelists discussed at length on the proposal of imposing taxes on the Worker’s Profit Participation Fund (WPPF) on different organisations.

They also expressed their concern that if this bill is passed, this will have a huge financial impact on businesses upon whom WPPF provisions of the Bangladesh labor laws are applicable.

Moreover, speakers mentioned that this provision conflicts with section 244 of the Bangladesh Labour Act, 2006 which allows deduction of the funds allocated to WPPF to arrive at a taxable income, and at the same time it will lead to a state of double taxation.

It was pointed out that the finance minister mentioned that WPPF is payable from tax profit after tax which seems misleading to the actual treatment and philosophy of WPPF. As per accounting principles, WPPF is payable from profit before tax. This will also put a negative impact on FDI climate as potential foreign investors will be reluctant to invest due to this irrationality of double taxation.

The discussants suggested to restructure corporate tax as well as the individual tax keeping in view our competitors to increase foreign investment to enable confidence among private investors. The speakers also recommended that the foreign and local investors be encouraged to invest in Bangladesh.

Among the discussants there were good number of Chartered Secretaries (CS) present. They pointed out that they have the requisite capabilities to provide services in a single platform to promote ease of doing business, and recommended to support local investors who invested in the industrial sectors.

Therefore, businesses are to be encouraged in a wide scale to make use of the CS services including as VAT and customs consultants.