Parliament passed the Tk 5,23,190 crore national budget for 2019-20 fiscal themed as ‘Bangladesh on a Pathway to Prosperity: Time is Ours, Time for Bangladesh’ on 30 June. The government announced 1% cash incentives against exports to traditional export markets, though apparel industry leaders have demanded to increase the cash aid to 3 percent from 1 percent.
In response to the Bangladesh Textile Mills Association (BTMA) demand, the government withdrew the 5% VAT on the sale of local yarn and 5% advance tax on import of textile machinery, spare parts and some raw materials in the 2019-2020 budget.
What is your opinion on the new budget? Has it met your expectations?
Imranur Rahman, Managing Director, Laila Group
In the budget for the fiscal year 2019-20, the government has announced 1% cash incentives against exports to traditional export markets. But this is not sufficient. As the apparel prices are shrinking accordingly. So, to sustain in the textile and apparel industry, entrepreneurs must need more government support.
Md. Fazlul Hoque, Managing Director, Plummy Fashions Ltd
Overall I think that the budget is not bad for our sector. But there are some things which could have been enlisted in the new budget.
For example, the government should have focused a little more on our workers’ side. Nowadays, garment owners are having hard times providing different facilities for the workers because of Accord and Alliance.
The government can include these services for instance: ration, medication, transportation, residence, etc. for the workers in the new budget.
For the last few years most of the sectors such as textile, banks, etc. are facing a liquidity crisis. The government should give more focus on this aspect in the new budget.
Salauddin Chowdhury, Chairman, Stylish Garments Ltd
It is an investment-friendly budget. Single-digit bank interest, exit policy, giving 1% incentive for all RMG exports, not imposing more taxes, taking the initiative to form funds for new entrepreneurs, poverty alleviation, imposing taxes on harmful goods and reducing taxes on useful goods, etc. are very good signs for our economy from the new budget. The most challenging task will be to implement a single-digit bank interest rate.
Anwar-Ul-Alam Chowdhury (Parvez), Managing Director, Evince Group
In this budget, a big challenge is funding to create new entrepreneurs. Govt should include special fund of 1.0 billion for young entrepreneurs, to offer 5.0 percent tax rebate for companies who employ the disabled persons and form a national human resource development fund.
Md Shamim Reza, Managing Director, APS Group
Inclusive, business-friendly and pro-people’, budget published for the fiscal year 2019-20. Exports to traditional markets will fetch a cash incentive of 1 percent, and to non- traditional markets will earn an incentive of 5 percent.
Another expectation was to simplify the customs and income tax laws. Though the goal of the budget was to maintain ‘pro-growth’ in the long run, it’s monetary effect will be miserable for a few small and medium-sized factory. Another fiscal issue remained untouched into the budget, exchange rate where the taka has remained overvalued. However, I’m keeping my faith in the government’s foresight. We have to wait and see the convergence between goals and actions before assessing outcomes.
Sayed Mazakat, Deputy, Managing Director, Aaron Denim
Bangladesh Denim Textile industry is entirely dependent on the RMG sector. We will grow stronger with them. With further cash incentive announced, exports are bound to grow making the prospects of local denim manufacturer brighter. We expected the industry tax rate to be lowered but unfortunately, it has remained unchanged, which I feel is a downside as industry costs have already been increased significantly despite no real increase of sales price.