The tax cuts offered to businesses and industries in the proposed national budget will help increase investment and create more jobs rather than squeezing revenues, Finance Minister AHM Mustafa Kamal said.
“I hope the new budget will create new investment, employment and improve livelihood of marginal people,” he told reporters at an online post-budget press conference on Friday.
“Business is a flexible term, demand for which changes time to time. Tax benefits have been offered to them keeping in mind their demands at this moment as Bangladesh is connected to a market economy,” he added.
The finance minister has also defended the budgetary fiscal measures, saying that the government’s main target is to enhance tax collection with gradually lowering tax rates.
“Eventually we’ll be the winner. Tax rates have been curtailed to enhance collection.”
“The government’s work is not revenue generation only. Its major objective is employment generation. The fiscal measures will help it,” he added.
The finance minister’s comments came a day after he placed a lofty Tk 6.04 trillion budget for FY22 with huge tax cuts, including 2.5 percentage points cut in corporate tax, mostly for businesses and local industries with a hope to create jobs to help corona recovery.
Finance Secretary Abdur Rouf Talukder argued that the issue of employment generation has not only addressed from the fiscal side but also from expenditure side.
He pointed out that ADP expenditure has been increased more than what has been estimated in the 8th five-year plan only to create jobs.
The main objective of corporate tax cut and tax cuts for ‘Made in Bangladesh’ products is to increase investment and employment generation.
The move of expansionary fiscal policy and offering large tax cuts to the private sector will help raise the country’s investment-GDP ratio to 35 percent from present 31 percent in line with the 8th five-year plan, General Economics Division (GED) Member Dr Shamsul Alam hoped.