The New Nation - Internet Edition

BSS, Dhaka

Finance and Planning Adviser Dr AB Mirza Azizul Islam on Monday said the government has already taken steps to meet challenges facing the implementation of the budget.

He was talking to reporters at Bangabhaban after meeting President Prof Dr Iajuddin Ahmed.

The President approved the budget for 2008-09 in the meeting and also signed the appropriation (supplementary) Ordinance 2008.

"There are two main challenges - increasing the collection of revenue and improving the administrative performance of the bureaucracy," he said of the main budgetary challenges.

"I think its goals are achievable as the tax and duty were kept at much lower levels to encourage investment in the private sector to boost economic activities," he added.

He said the President gave the assent to the budget after adjustments in some proposals.

The finance adviser said the budgetary expenditure in the new year would increase due to significant expansion of social safety net. The government has increased the monthly allowances for distressed and war injured freedom fighters by 50 percent, he said.

The allowances for teachers of the community-based schools have also been raised by 40 percent, he said adding these adjustments have been made following public suggestions on the proposed budget.

Accordingly, the limit for tax free income of individual taxpayers has been raised to Taka 165,000 and those for 70-over old people and the disadvantaged have been raised to Taka 1,80,000.

Tax on dividend of company shares has been lowered at 20 percent. The government would also modify the income tax ordinance to exempt tax at source on interest or profit from deposit pension scheme.

Income from 'zero coupon bond' would be tax free except for banks, insurance and other financial institutions, a handout distributed on the occasion said.

It said import duty on refined sugar will be Taka 7,000 per ton from Taka 5,000 ton now. Duty on writing and printing paper would continue at 25 percent.

Duty on printed paper will increase to 25 percent from 15 percent, in addition to a 20 percent supplementary duty at import stage to protect domestic printing industry.

Duty on children's picture, drawing and colouring books will be at 25 percent instead of 10 percent, but the VAT on the same will be 7 percent from the proposed 15 percent.

Duty on MS ingot and billet has been fixed at Taka 2,500 per ton while duty on zinc ingot will be 7 percent from the proposed 15 percent. On import of aircraft, aircraft engine and parts there will be zero duty.

VAT on the satellite channels will be 25 percent, down from proposed 35 percent. VAT on plastic sandals and shoes will be applicable to price ceiling at Taka 60 instead of Taka 45 now.

The price slab of cigarettes for tariff valuation will be Taka 41, keeping the supplementary duty at 57 percent unchanged in the approved budget.