Vol. 5 Num 921 Fri. December 29, 2006  

Cut in duty on raw materials, capital machinery sought
Economy under strain: MCCI

The Metropolitan Chamber of Commerce and Industry (MCCI) has urged the caretaker government (CG) to reduce import duty on basic raw materials and capital machinery from existing 5 percent to 2.5 percent.

The chamber also requested the government to cut the import duty on intermediary goods from 12 percent to 7.5 percent.

The MCCI made the plea while members of the new committee of the chamber, led by its president Latifur Rahman, met Finance Adviser Dr Shoaib Ahmed in Dhaka yesterday. The delegation also placed a set of recommendations to the adviser.

They said all indicators show that the economy is under strain and it is likely to slow down further in the last part of the current fiscal year. It is most essential to keep the economy in the growth path, for which credit flow to the productive sectors and cost of funds are important, they added.

They felt it necessary that the bank rate and end cost of funds should be coherent. It has been seen in the past that given credit facilities, small and medium enterprises (SMEs) could contribute quickly and improve their competitiveness.

Terming the restrictions on foreign tours of company directors under the Finance Act 2006 a high-handed provision, they appealed to the CG for deleting the provision saying it will affect the industries, particularly the export-oriented ones where foreign tours are an essential part of business.

About 3 percent advance income tax on payments made by credit cards, they said this is not only unprecedented, but also anomalous in the sense that personal credit cards have to be used (since corporate credit cards are not issued in Bangladesh) for payment quite often for corporate bills like hotel bills and entertainment bills.

The MCCI leaders requested the finance ministry to give a directive to the Bangladesh Bank not to go ahead with the central bank's proposed debt-equity guideline for limiting borrowing of public limited companies. The bank borrowings should be left to bank-client relationship, they pointed out.

They demanded of the CG to start a review on cascading effect of tax on tax so as to help the industries facing the emerging global trade scenario.

On the Securities and Exchange Commission's (SEC) requirement of companies having paid up capital exceeding Tk 40 crore in case of conversion to public limited companies, they suggested that the SEC notification in this regard should be withdrawn immediately on the plea that such provision is contrary to basic freedom.

The MCCI leaders demanded disbursement of the cash subsidy, placed under the Bangladesh Bank but not yet started, among the non-traditional exporters who had to face difficulties in the last couple of months.

They told the finance adviser that Bangladesh has been once again appointed as the coordinator of the 50 least developed countries (LDCs) in the World Trade Organization, but they are yet to know the role the country's mission in Geneva has been playing after suspension of the WTO talks since July.

They also suggested that operation of ports, particularly the Chittagong Port, should be kept outside the purview of any political or party line controversy in the interest of the country's economy.