Dhaka: Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) president M Shafiul Islam Mohiuddin has said the budget passed in parliament on Wednesday would encourage businesses to invest more.

"As a result, more employment opportunities will be created and the economy as well will get a boost," Mohiuddin said, while talking to reporters in his office on Thursday.

Appreciating the government's move to defer by two years the plan to enforce the VAT and SD Act 2012, the FBCCI president said MPs showed their respect for the country's citizens by doing so.

While conceding that it is no success for the government to walk back on its plans to implement the VAT and SD Act 2012, Mohiuddin preferred to "see the positives coming from the move and block out the negatives".

On the increase in the Tax at Source (to 1 percent from 0.7 percent), the FBCCI president was not unduly anxious on the effect it may have on Bangladeshi goods competing in the international market. "It's not an income tax. It is a tax on sales which is imposed on freight on board. A trader has to count the tax only if he earns 3 percent net profit."

Mohiuddin, also a former BGMEA president whose main business is garments, was also very eager to stress that the industry is passing a hard time, and the government has to provide incentives, tax reductions and other forms of support to revive the industry.