ICAB members’ conference on Salient features of Finance Bill 2020-21 and Macroeconomic aspect of National Budget.
Some steps have taken in proposed budget 2020-2021 would affect the businesses. Specially decisions to make double in advances tax for VAT appeal, empowerment of field level VAT officials, minimum tax in few areas and on tax at sources, would affect the business, Experts at a members’ conference on Salient features of Finance Bill 2020-21 and Macroeconomic aspect of National Budget 2020-2021’ opined.
ICAB organized the Virtual Members’ conference through Zoom Video conferencing on 18 June 2020 where Md. Alamgir Hossain, Member (Tax Policy), Ranjan Kumar Bhowmik, Member ( Tax Survey and Inspection) and Md. Masud Sadik, Member (VAT Policy) of the National Board of Revenue (NBR) were present as Special Guests. ICAB Council Member and Past President Md. Humayun Kabir FCA moderated the session as the Session Chairman while ICAB President Muhammad Farooq FCA delivered address of welcome.
Md. Shahadat Hossain FCA, Council Member-ICAB and Snehasish Barua FCA, Partner, Snehasish Mahmud & Co, jointly presented the keynote papers.
The members of the NBR exchanged their views on the budget and the Finance Bill 2020. They express their solicitation on some suggestions arose from the discussion. Although there is a little scope to change the provisions in budget while it is being passed, said Alamgir Hossain, Member (Tax policy) of NBR.
Criticising the move to increase the tax on the use of internet and mobile phone, ICAB President Muhammad Farooq FCA said, such initiative would retard the government’s vision to build the digital Bangladesh. Mr. Farooq also highlighted some important points relating to VAT and Tax issues of the Finance Bill 2020.
The 1st paper presenter Md. Shahadat Hossain FCA, Member Council -ICAB discussed macroeconomic aspects of the budget. The objective of his presentation was to have an overview about the impact of recently presented national budget on macro economy of the country.
We all know the budget of FY 2020-21 has been announced in such a circumstance when the whole world, including our country, is passing through a very crucial time due to the COVID-19 Pandemic. So, we cannot expect the budget to be traditional in line with the previous budget, added and said, the volume of the budget is 18% of total GDP. Development expenditure has been increased only 6% and revenue has been targeted only 8.6% higher than previous revised budget, no doubt, it is due to prevailing pandemic situation, he further said.
Total projected revenue of Tk 378,000 crore includes revenue under NBR Tk 330,000 crore i.e. 87%. Revenue under NBR has been projected only 9.8% higher than the revised budget of FY 2019-20 which appears to be rational but if we look at the actual collection (July-March), it is only Tk 136,459 crore. How far it is possible to collect further 164,041 crore (55% of revised budget) by the three months, Mr. Hossain posed a question and said considering the past records and prevailing pandemic situation, it is clear that the revenue collection target of this budget is highly ambitious.
In the paper he said, Budget allocation has been made keeping in mind the impact of COVID-19. The pandemic has direct impact on health sector and due care has been given in this sector. Indirect impact of COVID-19 on economy due to enforced general holidays, lock-down, closure of factories and business income of the common people has led to increase the poverty level, he opined. In order to overcome the situation, the government has rationally allocated Tk 95,574 crore which is 16.83% of total budget and 3.01% GDP in the social security sector, as against Tk 81,865 in FY 2019-20, he said.
Expressing doubt over implementation of ADP, he observed that during first nine months of the year 2019-2020 the implementation remains very poor and slow in terms of expenditure. For example during the first nine months of FY 2019-20 (July–March) ADP has been implemented only Tk. 60,606 crore which is 31% of revised budget. Balance 69% equivalent to Tk. 132,315 crore has to be spent during the next three months.
There is every possibility of failing to achieve the target of collecting tax revenue and manage the foreign loan as expected and it may create scope of huge deficit in the budget, he further added.
Focusing on Finance Bill 2020 another keynote paper presenter Snehasish Barua FCA said, double in advance tax for VAT appeal, empowerment of field level VAT officials, minimum tax in few areas and tax at sources ultimately would hit the business. He urges for revisiting these provisions to make the budget more congenial for businessmen and the people. Session Chairman Md. Humayun Kabir FCA opened the floor discussion and summed up the session prudently. Other members of the NBR also spoke on the occasion.