The MCCI in its budget reaction however said the increase of customs duties from five per cent to 10 per cent of the minimum slab on industrial raw materials may impact unfavourably on the local industry.

It also termed undesirable the imposition of duties on computers in a country with such low levels of information and communication technology (ICT) penetration.

"The extension of time limit for depositing tax deducted at source from one week to three weeks is appreciated," read the statement signed by MCCI President Latifur Rahman.

The MCCI hailed the withdrawal of advance income tax on credit cards but expressed disappointment at the stipulation that directors of companies cannot make more than four business visits per year.

"In this age of globalisation and with our dynamic export base, businessmen will need to undertake trips abroad depending on the exigencies of the business."

The chamber appreciated the withdrawal of the turnover tax facility on sectors such as soft drinks, insurance companies, restaurants and WASA and the imposition of VAT on these sectors, as some of these are already under the VAT net.

"Bangladesh is reeling from severe power shortage which is holding back growth of the economy. Although measures have been proposed for building power generation capacity within the next three years, much more needs to be done on an emergency basis to resolve this crisis."

"There is a mood of optimism in the country with governance measures pervading all sectors including administration and the economy."

The chamber said the measures planned to rein in inflation are welcome and the government needs to remain vigilant that the price of essential commodities remain within the reach of the common people. "In this context, the increase of certain social security measures, though meagre due to resource constraints, is also highly commendable," it said.

"The withdrawal of the provision for whitening black money has been a constant refrain of the MCCI and we welcome its abolition," the chamber said.

It said the much-needed step taken to isolate the mammoth burden of the BPC (Bangladesh Petroleum Corporation), which was affecting the financial liquidity of the public sector banks, is appreciated. The chamber strongly welcomed the subsidy earmarked for providing diesel and fertiliser inputs to the agriculture sector.

Lauding the withdrawal of the development surcharge, the MCCI said, "The move towards curtailing discretionary powers of tax and VAT officials is also a step in the right direction but much more remains to be done in this area."

The continuation of the existing export incentive structure with a focus on high growth and high value added sectors is also welcomed, as is the extension of the bonding period from one to two years, it said.

Hailing the steps taken to exempt income generated from Zero Coupon Bonds from income tax, the chamber said it would provide a boost to the now stalled securitisation initiative, which provides banks and financial institutions with an alternative and cheaper source of funding.

"The abolition of provision of all up front and advance tax on government bonds is commendable but should be extended to bonds and securities issued by banks and financial institutions to allow for a vibrant and publicly traded bond market to emerge," it said.

The MCCI also welcomed the endowment allocation of Tk 1 billion for the SME foundation as SMEs are seen as a major employment-generating sector of the economy.

"We welcome the finance advisor's announcement that next year, the GDP growth will grow by over seven per cent. For this, investment-GDP ratio will need to grow from the current 26.2 per cent to over 35 per cent," the MCCI said, adding that the government should also endeavour to minimise its level of borrowings to curb inflation and knock-on effects on the economy.

"In conclusion, we would like to reiterate that to maintain and accelerate the present growth trajectory of the economy, we must build on the current initiatives underway to bring in good governance and curbing of corruption. We should check inflationary pressure, support our agriculture and industrial sectors and create a business friendly environment," goes the MCCI statement.