The New Nation - Internet Edition

DCCI Board of Directors in an instant meeting just after the announcement of the national budget 2008-09 has prepared an initial comment which are mostly focused on the SME development. DCCI past presidents and directors were present while Hossain Khaled, DCCI president chaired the meeting.

Proposals

In the Finance Act Bill of 2008-09 at its page 15, under section 82 under treading Assessment on Correct Return, it is mentioned at para © that such return does not show any loss or lesser income than the last assessed income, or assessment on the basils of such return does not result in refund, this will discourage submission of correct return This provision at para C should be withdrawn.

2 Income tax exemption limit and slabs has been kept as per the limit of the last year while female tax payers and senior tax payers of ages exceeding seventy, the exempted limit has been increased. We propose for increasing the tax exemption limit to two lakh fifty thousand for individual tax payee.

3 In the proposed budget in declaring untaxed income, penalty at the rate of 7 per cent on top of the tax payable has been fixed. We propose that if the investment is in manufacturing sector. The penalty should be waived.

4. Corporate rate of taxes for public trading companies has been reduced from 30 per cent to 27.5 per cent for companies not listed for public trading to 37.5 per cent from 40 per cent. The rate is 45 per cent for banks insurance, financial institutions and mobile phone operators. Banks, insurance leasing and mobile companies should not be treated differently, rather it should be at par with publicly traded company and non-publicly traded company as the case may be.

5. Income tax on profit of public limited companies has been taxed at 27.5% on condition that the company must declare at least 10% dividend and must pay the dividend with in the time frame declared by the SEC. While we welcome the decision of 10% rebate in case of at least 20% dividend and the payment of dividend within the time as per SEC, we propose withdrawal of minimum 10% dividend clause.

6. The provision for15% tax on dividend and the tax rate matters should be dealt with as per other provisions of the act. Because the decision will create adverse effect on capital market and will discourage investment.

7. Budget endorsed that there is a wide-spread allegation of various malpractices of the PSI companies but because of the inadequacy of both in terms of infrastructural and human resources PSI system has been continued. DCCI feels that the monopolistic benefits of PSI companies should be curtailed by allowing existing companies to operate in all regions so that a competitive environment is created.

8. In order boost domestic production and encourage SMEs we propose LC value upto 20.000 should be kept outside the purview of PSI. In addition, a cut off date should be declared for discontinuation of PSI system

9. In order to encourage local automobile assembling industries, the differential tariff of CKD and CBU vehicles should be maintained. The budget failed to give any directives in that respect. We urge upon to get directives in this regard. In addition, vehicles imported/equipped with dedicated CNG engine should receive preferential duty benefits.

10 The budget fails to reflect any significant steps to address the escalation of price hikes. We believe that, in order to tackle food security and energy issues government will take necessary steps to boost domestic production and distribution with low cost financing.

11. Zero-tariff for all the raw materials which is not produced in the country along with removal of all non-tariff barriers should be ensured.

12 At this stage of our development, we need more money for developmental activities. The government must be careful to save money through judicious use of government funds and avoiding government borrowing.