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Planning Minister MA Mannan said the government has been facing numerous stumbling blocks from vested interests while allocating funds for the budget.
“The culture of allocation should not exist in a democratic society but breaking this barrier suddenly is not easy. Prime Minister Sheikh Hasina is trying and hopefully, she will succeed,” he added.
Planning Minister was speaking as the chief guest in a pre-budget roundtable titled “Macro Economy: Expectation from the National Budget 2022-23” organized jointly by the Institute of Chartered Accountants of Bangladesh (ICAB), and the Economic Reporters Forum (ERF) on Saturday in the capital.
The planning minister also said that the reform of the National Board of Revenue is very urgent.
“It is unfair to give government allocation in an unproductive sector. In spite of many problems, the present government has made visible development in the last 10 years,” he added.
In their budget proposals, the ICAB wants increasing revenue, avoiding contradictions and tax evasion, ensuring transparency in law enforcement, encouraging investment activities and discouraging capital smuggling.
Shahadat Hossain, president of the ICAB, presented the budget proposal saying that one of the main causes of economic inequality in the country is the over-reliance on indirect taxes – about 70%. Reliance on direct taxes should be increased.
“Although the number of TIN registered taxpayers in the country is about 60 lakh, only 24 lakh pay regular taxes, which is only 1.33% of the total population. The tax-to-GDP ratio is only 8.9%, which should be at least 20%,” he added.
In this regard, e-TIN must be affiliated with the BRTA, the Land Records Offices, and the City Corporation to ensure that all assets are reflected in the taxpayers’ return, he recommended.
The ICAB has also instructed the proper use of tax money suggesting more subsidies in agriculture, more investment in the education and health sector, and more allocations for rural infrastructural development.
ICAB president asked for a reduction in expenditure on the non-performing interest sector. Expenditure on interest was only 2.41% in 1974-75, whereas in the 2020-21 budget, it increased to 11.4%.
“The single window service should be introduced in the country as soon as possible to facilitate business with the aim of creating employment for the unemployed and creating new entrepreneurs,” he added.
Ahsan H Mansoor, executive director of the Policy Research Institute (PRI), said that apart from various mega projects in need of the country, many less important mega projects are also being taken up which could lead the country to face the consequences of Sri Lanka if investments in these projects do not return quickly.
He also said that learning from Sri Lanka, we have to think about mega projects now. “If the money we are investing in these projects does not return in time, then the situation in Bangladesh could be similar to that in Sri Lanka,” he added.
He also said that Padma Bridge is important, but there is not much need for the Padma rail bridge on that route.
Moreover, the Dhaka-Chittagong railway line is very important as it is the lifeline of the economy. But Bangladesh doesn’t need to spend a lot of money to build a railway line to the Myanmar border.
He also said that Bangladesh is still in a good economic condition, adding that future decisions have to be made more carefully.
He further said that the recovery from the pandemic is going well. Now, systematic steps are needed in account with the global situation.
“Imports have increased. Now we have to be careful about reserve costs. Now it would not be right to keep the maximum limit on interest rates,” he added.
He also called for the separation of tax policy and tax administration, expansion of guarantee schemes for the development of the SME sector, and reform of VAT law.
He also recommended restraining the country’s expenditure on government officials.
“Our country is prone to overspending. But we do not have the capacity to spend that much. And we have to be restrained because we can’t afford it,” he added.
He also said that as the cost of living rises, bank’s deposits are declining, which will also reduce the bank’s ability to lend.
“At present, the profit in the banking sector is declining. The return on assets of the banking sector was 1.72%, which now came down to 0.8%. So why are there so many banks in the country? We have to think seriously about these things,” he added.
MCCI President Saiful Islam said that it was impossible to do much as planned in the last two years due to the pandemic.
“As a result, the 8th Five Year Plan needs to be revisited. Because when this plan was made, there was no pandemic, no Russia-Ukraine war,” he added.
He also proposed to reduce corporate tax and give equal tax benefits to all export-oriented sectors.
The speakers further said that this year’s budget is very important as the country is now in the recovery stage from the pandemic, on the way to transition from LDC and a global crisis is on.
So, they recommended not to formulate any conventional budget this year.
Among others, Rasheda K Choudhury, former adviser of the caretaker government, Md Eunusur Rahman, chairman of Dhaka Stock Exchange, Asif Ibrahim, chairman of Chittagong Stock Exchange, Abul Kashem Khan, former president of DCCI, Shomi Kaisar, president of e-Cab, also spoke in the dialogue.
Md Humayun Kabir, past president of ICAB, moderated the dialogue, where Shamima Rinvy also spoke, and SM Rashidul Islam, general secretary of ERF gave the concluding remarks.
(DT)
