The government should widen tax net to reach its revenue earning target instead of putting pressure on the existing taxpayers, leading chambers said yesterday in their budget reactions.

"All sectors of the economy should be progressively brought under the tax net," said the Metropolitan Chamber of Commerce and Industry (MCCI).

The Chittagong Chamber of Commerce and Industry, in a statement, said the government should

not bother the existing taxpayers in any way as it looks to meet its increased revenue earning targets.

"Rather, the government should think of expanding the tax net and identifying new taxpayers,” said its Vice-President Syed Jamal Ahmed.

He also called for the withdrawal of tax for the private sector education institutes.

The government's intent to raise the export tax at source to 1 percent from the existing 0.3 percent in fiscal 2015-16 has not gone down well with the chambers, as it would drive some sectors to financial crises.

The garment, textiles and other export sectors are currently facing the twin challenges of the Eurozone crisis and the increased costs of compliance, MCCI President Syed Nasim Manzur said in a statement.

Subsequently, he urged the government to reconsider its decision and push back the hiking of tax at source until the industries are on a stronger footing.

"We must recognise the state of specific sectors and their ability to pay."

The chamber welcomed the government's decision to increase the salary of government employees and expects the move will result in commensurate improvements in efficiency and service quality.

It also welcomed the budgetary proposal to reduce the corporate tax rates in some instances - a longstanding demand of the private sector.

The proposed increase in value-added tax from 2 percent to 4 percent for superstores would be economically damaging to this emerging but struggling industry with high employment potential, Manzur said.

The chamber is also opposed to the idea of imposing VAT on tuition fees at any level, as it would take quality edu-

cation beyond the reach of the wider population.

The allocation to education and health sectors, according to MCCI, is very low relative to the country's needs and also compared to public sector allocation in neighbouring countries. Subsequently, it called for the highest emphasis on primary and secondary education.

The Dhaka Chamber of Commerce and Industry welcomed the government move to increase the minimum individual tax-application slab to Tk 250,000, seeing the rise in living costs in recent times.

However, this could have been made Tk 275,000 to increase the number of taxpayers and the tax collector's takings, it said in a statement.

The moves to levy a 45 percent tax on cigarette makers and cut taxes related to the stockmarket were appreciated by the chamber.

DCCI expressed concern about the government's decision to borrow Tk 38,523 crore from the banking sector to finance the budget deficit, as it will impede the flow of funds into the private sector and ultimately affect growth.

The Bangladesh Chamber of Industries hailed the government move to reduce the tax on import of raw materials, as it will be helpful for industrialisation.

It also lauded the move to make cigarettes more expensive, but said steps must be taken to ensure the youth do not get attracted to cheaper but more harmful and easily available drugs.

Bangladesh Frozen Foods Exporters Association's acting president Md Colam Mostafa said the proposed 1 percent tax at source on export proceeds would create a financial crisis for the sector.

The sector has been experiencing negative growth for the last eight to nine months due to lower prices of shrimp in the global market.

Subsequently, he urged the finance minister to impose a minimum tax at source for now and gradually raise the amount.

The Foreign Investors' Chamber of Commerce & Industry said the proposed budget is somewhat challenging.

It, however, appreciated the plan to increase allocation for social security and welfare programmes. But the chamber expressed concern about the declining allocation in the health sector.

The chamber feels the proposed budget with necessary amendments will accelerate investment, and improve the business environment and socio-economic condition of the country.