Finance Minister AHM Mustafa Kamal on Thursday proposed a tariff hike on imports of a few products that are produced locally by small and medium enterprises (SMEs) in 2022-2023 fiscal year in a bid to protect the domestic industry.
Industry insiders have welcomed the proposal, saying the tariff increase will help expand the domestic industry, even if their expectations from the budget were not met.
In his budget speech on Thursday, the finance minister said the cottage, micro, small and medium enterprises (CMSMEs) will be safeguarded in the budget for the upcoming fiscal year.
He said loans and other facilities would be provided to the CMSMEs as before.
The finance minister also said, "Annual turnover of up to Tk70 lakh has been made tax-free for any business firm in the SME sector owned by a female entrepreneur."
Minister Kamal also proposed to keep the opportunity of importing capital equipment for SMEs at a 1% rate irrespective of commercial and industrial establishments.
He also proposed to increase the supplementary duty on the import of some finished products of the paper cup manufacturing industry.
Regarding the development of the CMSME sector, the finance minister said necessary support was being provided to the entrepreneurs in this sector to increase self-reliance, create employment and encourage entrepreneurship.
"We have taken initiatives to increase the net balance of CMSME loans and advances to at least 25% by 2024 with an increase of at least 1% per annum," he said.
He continued that authorities concerned have been instructed to consider refinancing new entrepreneurs with a maximum of Tk10 lakh without collateral and Tk25 lakh with collateral on a case-by-case basis.
AHM Kamal said the 10-year tax holiday facility given for the light engineering industry in the current financial year will be maintained in the next year as well.
However, there is no incentive for the industry as a whole.
The finance minister said the value-added tax would be waived for the supply of locally collected scrap from the foundry industry in the light engineering sector.
Industry insiders say the decision to exempt VAT would be helpful to the foundry industry. Because it was quite complicated.