Highlighting a range of challenges, including high inflation, dwindling remittance growth, and a limited export portfolio, FBCCI emphasised the urgency of addressing the forex crunch through collaborative efforts with stakeholders.
The FBCCI made the appeal in its proposals submitted before the finance minister recently over tax and other budgetary measures for fiscal year 2024-25 beginning from July.
Bangladesh has been experiencing forex crisis owing to a sharp depletion of reserves driven by escalated imports, lower than expected exports and remittances, and alleged money laundering.
FBCCI conveyed these concerns in proposals presented to the finance minister for consideration in the upcoming fiscal 2024-25 budget. Bangladesh’s forex crisis stems from a significant decline in reserves due to heightened imports, subdued export and remittance earnings, and alleged instances of money laundering.
As per reports, reserves, which stood at $19.45 billion as of March 27, have plummeted from over $41 billion two years ago.
To mitigate this crisis, FBCCI stressed the need for prudent project selection with foreign financing and underscored the necessity of strong political commitment to combat money laundering even as it advocated for either establishing a banking commission or instituting reforms within the banking sector to uphold financial discipline and governance.
FBCCI outlined key priorities for the next fiscal budget, including measures to reduce the cost of conducting business, avoidance of loans with stringent terms, and enhancement of infrastructure. It urged for improved coordination among customs and VAT departments through integrated automation processes, aiming to streamline compliance procedures for businesses.
Moreover, FBCCI criticised the prevailing practice of rewarding customs, VAT, and income tax officials, which it believes fosters abuse and undermines honest entrepreneurs.
The trade body advocated for the cessation of such reward systems to curb officials’ discretionary powers.
Furthermore, FBCCI proposed the withdrawal of advance income tax and advance tax on imported raw materials to facilitate industrial production. It suggested restricting the application of supplementary duty to luxury items and essential goods to safeguard national interests.
Fibre2Fashion News Desk (DR)
