• Tuesday, October 21, 2014

Budget revives hopes

Bangladesh Economic Association says timely implementation is the main challenge

Star Business Report

The proposed budget for the next fiscal year revives hopes, as it contains some courageous, transparent, goal-specific and implementable steps, Bangladesh Economic Association said yesterday.
"However, the people who will be implementing the Vision 2021 have to believe that whatever fiscal, tax and public spending measures are taken, they have to be pro-poor," it said.
The platform of economists came up with the observation at a press briefing on the just-announced budget at its office in the capital.      
A single budget alone cannot help Bangladesh implement its Vision 2021 goals, the BEA said. "The budget is undoubtedly a roadmap for reaching the goals."
In a written statement, read out by BEA Secretary General Toufic Ahmad Choudhury, the association said timely and quality implementation of the budget would be the key challenge for the government.
"All ministries and government agencies will have to follow the budget implementation guidelines of the finance ministry properly for enhancing effectiveness of implementation."
The BEA called for a provision, which will penalise the ministries and government agencies if they fail to follow the guidelines.
The association also reiterated its stance against the scope to whiten black money -- an opportunity which has been offered in almost every budget but did not bring any benefit.
"We are against it on principle," said Abul Barkat, president of the association. "The government should not take any measure that discourages honest people to pay taxes."
However, the BEA said the government can earmark the infrastructure sector as the destination of the undeclared money, believed to be in the range of 42 to 82 percent of the country's gross domestic product (GDP).  
"The government should publish a white paper on it and set up a commission," it said.   The association suggested a number of areas for the government to raise its revenue collection.
Only around 50 people now pay Tk 1 crore or more in taxes. "But our estimate shows there are at least 50,000 people in the country who can pay Tk 1 crore or more in taxes."
"It means we can collect at least Tk 50,000 crore from them as income tax. This additional money should be spent to reduce economic and social inequality."
The government should make mandatory the payment of fees through account payee cheques for professional firms such as consulting, outsourcing, doctor chambers, law and accounting firms. "It will enhance revenue incomes of the government."
The prices of properties should be re-valued every three years to generate more revenues from the sector.
The association urged the government to conduct a taxpayer survey and property survey by December this year.
The BEA called upon the government to raise allocation for social safety net schemes by 25 percent, as more than 75 percent of two crore households eligible for the benefit do not receive so.
The final budget should spell out steps how it can reduce spending and wastage for the sectors such as public administration, as the proposed budget does not say anything about it clearly.
The BEA also proposed the government should completely annul the discretionary power of the revenue officials.
The association said raising public investment would not be able to narrow the stagnant investment gap.
"Firm and realistic steps have to be taken to increase public sector spending."
To do so, the cost of doing business has to be brought down and infrastructure improved, apart from making land, electricity and energy available for new industrial units.
The government should make it mandatory for the tax identification number holders to submit returns.
The BEA said the budget also did not talk in detail about steps to develop human resources and continue reforms in the stockmarket. The association said the target to bring down inflation below 7 percent in the next fiscal year can be achieved.
The association also criticised large allocations for sectors such as administration and defence.  "The government's spending for unproductive sectors such as general administration, defence and internal security is unacceptably high."
The association also said healthcare lags behind many other sectors when it comes to allocation, which is not acceptable.
The government's plan to borrow Tk 31,000 crore from the banking sector to partly meet the budget deficit would put pressure on liquidity, which will ultimately increase interest rate, the BEA said.

 

Published: 12:01 am Sunday, June 08, 2014

Last modified: 9:36 pm Sunday, June 08, 2014

TAGS: Budget revives Bangladesh Economic Association budget implementation guidelines gross domestic product (GDP).

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