The Institute of Chartered Accountants of Bangladesh (ICAB) on Saturday in its budget reaction said achieving a growth target of 7.2 per cent will be "difficult but not impossible".
The ICAB said the budget for fiscal year 2021-22 (FY '22) is ambitious and efficiency, transparency and accountability are essential for its implementation.
It said the 6.20 per cent deficit for the proposed budget is the biggest deficit in the history of the country's annual expenditure due to a low revenue collection amid the ongoing global epidemic.
"We do not view the budget deficit as negative in terms of implementation capacity," ICAB president Mahmudul Hasan Khusru commented about the FY '22 budget.
Council Member-ICAB Md. Shahadat Hossain and Snehasish Barua jointly delivered the conference paper while Md. Humayun Kabir, FCA, moderated the programme through a virtual platform.
The ICAB said that the government spending will have to increase in all sectors where domestic products and services are used… as a result, employment in the country and the flow of money to the people will rise.
It said extensive economic activities are needed to mitigate the effects of the Covid-19 pandemic on the economy and an increase in investment is required to create jobs for the unemployed.
Terming the eradication of Covid-19 number one challenge, the institute said as long as the coronavirus epidemic exists in the country, there will be no significant investment, nor increase in employment.
The ICAB strongly believed that there was a need to increase allocation in the social security sector considering the fact that a large number of people in the country were falling below the poverty line due to coronavirus-induced general holidays, lockdowns, job cut in manufacturing companies, closing of businesses multiple times amid the global pandemic.
The professional accountants' body said it may not be possible to meet the supplementary budget in the end although the supplementary budget for fiscal year 2020-21 has been reduced by five per cent.
The ICAB termed the 25 per cent tax rate reduction for the one person company reasonable.
It also termed the tax rate cut for listed companies from 25 per cent to 22.50 per cent and for non-listed ones from 32.50 per cent to 30.00 per cent commendable.
The ICAB thinks that the tax hike proposal on mobile financial services needs to be withdrawn in order to attract more customers to MFS services during the ongoing pandemic, so that a cashless society can be established.
It also thinks that tax breaks for cloud services, system integration, e-learning platforms, e-book publishing, mobile application development services and IT freelancing providers until 2024 is a very good initiative.