No change in corporate tax, no new tax: Muhith

Finance Minister AMA Muhith on Tuesday ruled out the possibility of changing the corporate tax rates in the next budget and said there would not be any new tax.“We’ll not change the corporate tax rates by any means in the coming year,” he said at a pre-budget meeting with the Economic Reporters Forum (ERF) at his Secretariat office.
ERF president Khawaja Mainuddin and general secretary Abdur Rahim Harmachi also spoke on the occasion.
Muhith said although there will be no reform in the corporate tax next year, but there might be some directions.
Asked whether there will be any new tax in the next budget, he said tax revenue usually increases with the growth of income and there was no such increase of taxes in the last four years.
“But, there was a significant growth in revenue earnings, because of the efforts so that more people pay taxes… there is no such plan of imposing or increasing tax in future specially in the last year (of present government).”
The Finance Minister, however, indicated that the non-tax fees will be increased as those are about 20-30 years old.
Mentioning that the upcoming budget would be the last of the present Awami League-led government, he said there will be no new initiatives and the budget will be prepared based on the performance of the current fiscal year.
About the targeted GDP growth rate of 7.2 percent for the current fiscal, Muhith reiterated that it would not be achieved, but hoped that the growth rate will not fall below 6.4 percent as achieved in the last fiscal year.
He said the next budget deficit will also remain 5 percent of the GDP as the government is not going for a larger expansion of the budget.
The Finance Minister also reiterated that steps will be taken in the next budget to clear all the past arrears of the contractors including that of the LGED, and Roads and Highways in the first quarter of the next year.
The government does not want to put arrear burden of Tk 2,000 crore on the next government, he said.
Muhith mentioned that the government’s subsidy position is in a good condition due to the price adjustment in petroleum apart from power tariffs.
He said that due to more domestic allocation for the Padma Bridge project, various ministries will not have any additional allocation in the next year and they would have to remain at their current level of allocation.
About the revenue earnings target, he said it would not be much more than the current year.
The Finance Minister also noted that the government would fall 1.5-1.75 percent short of its target of reaching the public expenditure ratio of 20 percent of GDP.
Replying to another question, he said that possibly there is no chance for raising the allowances of the freedom fighters in the next budget.
Referring to the recent downtrend in the capital market, Muhith doubted that the downtrend in share prices is indirectly an attempt to delay the ongoing process of demutualization.
He also hoped that the related law on demutualisation of the bourses would be passed in the next session or after that session of parliament.
The Finance Minister said there would be not much of a difference on the priorities of the next budget as there will be highest emphasis on power and energy followed by agriculture, rural development, human resource development, social security and food security. UNB

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