Shahidul Islam, a resident of Jalkuri in Narayanganj, used to do business at Munna Nagar Plaza. Burned a lot of wood and established his own clothing brand called 'Shironam Meena'. He rented a factory in the signboard area and made T-shirts and polo shirts and sold them in his own shop. The day was going well. Last December, Dhaka South City Corporation conducted an operation to evict illegal shops. Out of 911 shops, Munna's shop was also broken in that raid. Then the second wave of corona made even more destitute. Not only Munna, thousands of entrepreneurs were affected. They were looking at the budget with a hope of turning around, if some concessions were made. But alas! The budget did not mention the miseries of small entrepreneurs during the Corona crisis.
The proposed budget has given massive tax breaks to boost investment. Corporate tax, advance income tax, advance tax on VAT and penalty-simple interest, minimum tax has been reduced. VAT exemption-tax holiday facility is provided to new heavy industrial establishments. The finance minister has his hands full with big industrial entrepreneurs. But they have folded their hands in giving the main driving force of the economy to the entrepreneurs of the SME sector. However, he did not make a mistake in highlighting the contribution of the SME sector in the budget speech.
On page 81 of the budget speech, the finance minister said regarding SMEs, the importance of small and medium enterprises (SMEs) is immense in ensuring economic development and desired growth. The government is working tirelessly to create equal opportunities for participation of all in the low capital and production time dependent SME sector. The government is implementing priority programs to create small and medium entrepreneurs at the rural and marginal levels, especially women entrepreneurs and industrial workers. To boost the economy affected by the impact of Corona, the government has adopted several incentive packages including low interest working capital facility of Tk 20,000 crore for micro, cottage, small and medium industries, most of which have already been implemented. If these measures of the government are implemented in the SME sector, the contribution of this sector to the national economy will increase to 32 percent by 2024. On page 161, the number of beneficiaries under the incentive package is mentioned, it is said that 95 thousand 407 companies have benefited from this package.
In the proposed budget, the finance minister has increased the tax exemption limit for women entrepreneurs from Tk 50 lakh to Tk 70 lakh. Tax holidays and VAT exemptions are given to light engineering industries. Small and medium industries machinery has been allowed to be imported at one percent duty irrespective of commercial and industrial establishments.
In this regard, member of customs policy Syed Golam Kibria said, small and medium entrepreneurs can bring all machines included in the notification of capital equipment by paying one percent duty. In this case there was a problem regarding Advance Income Tax (AIT). The Income Tax Department has been asked to remove it.
Small entrepreneurs say that the government acknowledges the contribution of the SME sector in economic development. It is not reflected in the adoption of monetary and fiscal policies. Policies are adopted keeping the elders in mind. The little ones are always neglected. The incentives package announced by the government to deal with Corona has not benefited the real small entrepreneurs. Rather, the big ones have robbed the advantage of the small ones. Banks don't want to lend to small entrepreneurs.
Shahidul Islam Munna, the affected businessman of Narayanganj, said that the recession of business and trade started from March last year due to Corona. Unable to cope with the pressure, the city corporation demolished the shop in December. Thousands of small traders in City Plaza, Nagar Plaza have become destitute. Now running the family has become a responsibility. He also said that banks do not want to give loans to small traders. I heard that the government has given an incentive package to give low interest loans to small businessmen due to Corona. When we went to the bank to get that fund loan, we were informed that we will not get that loan. If you want another loan to start a new business, you will need this paper for a long time. Later the loan was not given again.
The proposed budget has conditionally exempted the supply of manufactured parts in the light engineering sector from VAT. The condition is that the parts which are exempted from import VAT and duty to the heavy industries of the country, will not have to pay VAT if they are supplied by the light engineering sector after production. However, for this the company has to be VAT registered and submit returns.
In this regard, Abdur Razzak, President of Light Engineering Industry Owners Association, said, Thank you for the government looking at light engineering industry. However, there is a question as to how much the small businessmen will be able to use this opportunity. Because most tradesmen need to upgrade their machinery to make industrial parts. This requires a lot of investment. The problem is, banks don't want to give money to small traders. If the financing problem is solved, the parts can be exported abroad.
In the proposed budget, the tax exemption limit for women entrepreneurs has been increased from Tk 50 lakh to Tk 70 lakh. However, no exemption has been given in the VAT sector. The finance minister said in the budget speech that the economic empowerment of women is of immense importance in the social and economic progress and sustainable development of a country. Economic and social empowerment of women will be ensured if the number of women entrepreneurs increases along with men as entrepreneurs in the economy.
In this regard, the president of the Women Entrepreneurs Network for Development Association (Wend) Dr. Nadia bint Amin said, I thank the government for giving income tax exemption in the budget. However, women entrepreneurs are the most victims of VAT harassment. Accounts are taken suddenly without notice. So the VAT turnover limit needed to be increased. He also said that most of the women affected by the corona virus did not receive the incentive money. Although Bangladesh Bank has made simple forms for women entrepreneurs, all kinds of documents are being asked to take loans from private banks. If any one is deficient then the loan is not available. He thinks that women entrepreneurs' chamber-associations can be used to ensure women get loans easily.
