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The Bangladesh Economic Association (BEA) yesterday placed an alternative budget of Tk 1,240,090 crore for 2019-20, more than twice the size of the outlay Finance Minister AHM Mustafa Kamal is expected to unveil.
Kamal may propose a budget of Tk 525,000 crore for the upcoming fiscal year in parliament on June 13.
“Our alternative budget proposal is implementable though some may call us mad,” said Prof Abul Barkat, president of the BEA, at a press conference at the CIRDAP conference hall in Dhaka.
“If I were the finance minister, I would propose such a big budget unless I am barred from doing so,” he said.
The BEA’s proposed budget gave priority on development expenditure, instead of non-development spending. It favoured allocating 57 percent of the resources for development expenditure.
To finance the alternative budget, the platform set a revenue target of Tk 1,002,510 crore, with 69 percent coming from direct tax. The National Board of Revenue would contribute Tk 671,560 crore.
The association said the rich do not pay taxes properly. It recommended collecting more revenue from them through direct taxes instead of indirect ones.
It said there are about 50,000 people in the country who have the ability to pay Tk 1 crore in taxes every year, whereas only 100-150 people are paying such amount of tax at the moment.
The BEA, the apex body of the country’s economists, suggested identifying people with taxable income and collecting tax through running a tax census.
The association identified 20 areas that usually do not generate revenue but have the potential to do so.
It suggested increasing tax on foreigners, fees on foreign advisers, wealth tax, licence renewal fee for pharmaceuticals, and service delivery and tolls.
The BEA proposed to get Tk 139,000 crore from three newly identified sectors: Tk 30,000 crore may come from wealth tax, Tk 35,000 crore from preventing money laundering, and Tk 30,000 crore from recovering black money.
In Bangladesh, the black money amounts to Tk 500,000 crore to Tk 700,000 crore, according to Barkat.
“This money should be recovered. Otherwise, honest taxpayers will be discouraged to pay tax.”
Every year, Tk 70,000-80,000 crore is siphoned out of Bangladesh, so the government can earn money by stopping it, according to the BEA.
It proposed meeting the deficit of Tk 237,580 crore through local bank borrowing, selling of savings instruments, issuing bonds and public-private partnership ventures.
The association said there is no need for foreign borrowing to finance the budget.
Prof Barkat said the association is not in favour of jobless economic growth because the real unemployed people in Bangladesh will number at least 1.75 crore. According to official statistics, the number of unemployed people is 26 lakh.
“It is huge so the upcoming budget should have a guideline to fight unemployment,” the economist said, adding that it is a big concern that inequality is widening.
Barkat, also a former chairman of the economics department of the Dhaka University, identified the main challenge of the budget is timely and qualitative implementation.
He recommended initiating a system of incentive and punishment to accelerate execution. Jamaluddin Ahmed, secretary general of the BEA, also spoke.
source (TDS)
