VAT rate cut likely: Muhith
Finance Minister AMA Muhith yesterday hinted a cut in value-added tax rate for businesses in the upcoming fiscal year, when the government aims to implement the new VAT law.
“We will give you a more comfortable rate,” he said at a discussion on national budget, jointly organised by the Federation of Bangladesh Chambers of Commerce and Industry and private television channel NTV at the capital's Sonargaon Hotel.
When reporters asked him later on the possible cut in VAT rates, he refused to divulge any further details.
Apart from the new VAT law and the VAT rate, the issues of cost of doing business and incentives to encourage investment and exports were also discussed.
MA Mannan, state minister for finance and planning, and Amir Khasru Mahmud Chowdhury, BNP leader and former commerce minister, also participated in the discussion.
The debate began with Chowdhury questioning the recent economic growth figures given sluggish private investment, youth unemployment, loan scams in banks and reserve heist at Bangladesh Bank.
“The growth figures are questionable. I am not the only person -- many economists have raised the issue.”
There is stagnancy in various areas but steady economic growth seems to be materialising as per the official statistics. He went on to term the phenomenon 'jobless growth'.
“It means that quality investment is not taking place. This is happening because of the non-representative character of the government.”
In response, Mannan said the government has taken various reform measures to reduce the cost of doing business and encourage investment.
He said inflation is on the decline, while the supply of commodities has remained stable.
“There is no question of deterioration in the standards of living,” Mannan added.
Muhith said the country has made a lot of progress since 2006, the last time that a BNP-led government was in charge.
“How can a person deny that fact? I do not understand,” he said, while citing the rural-urban integration as one of the major transformations in the last one decade.
“Now, the rural-urban divide does not prevail,” he said, adding that the integration is taking the economy to a new level of development.
Chowdhury said the reforms programmes carried out by the past BNP-led government were the main factor behind the private sector-led economic growth.
About the mega projects taken up by the present government, he said the costs of the projects have been shown to be higher than in China and Europe.
He alleged that there is a lack of accountability in the government.
The BNP leader said huge sums of funds are siphoned off abroad, and when the names of persons behind the capital flight are searched for, some politicians' names surface.
He also raised the issue of loan scam at banks.
Chowdhury also touched upon the reserve heist at the central bank and said the probe report is yet to be made public despite repeated promises by the finance minister.
At one point, Muhith said it is a matter of regret that politics have taken over the discussion regarding economics.
In reply, Chowdhury said politics and economics go hand in hand.
Muhith, pointing to Chowdhury, said: “Your speech has politics, not economics. Your comments do not reflect reality.”
Chowdhury said he used the figures of the government agencies. “Did I manufacture data?”
Later, Mannan pointing towards Chowdhury said: “You did not have any development philosophy and vision. We have given that to the nation.”
Mustafa Jabbar, president of the Bangladesh Association of Software and Information Services, said Bangladesh got the scope to be connected with submarine cable in 1992 but the then BNP government turned down the opportunity.
Muhith, responding to comments from businesses, said the reduction of oil prices would have helped the economy to grow faster. “It was my failure that I could not reduce the oil prices,” he added.
Businesses at the event demanded: cuts in the cost of doing business, incentives for entrepreneurs creating jobs, reduction of tax and other barriers to import environment-friendly technologies, protection to domestic industries, development of human resources and increased allocations for education and health in the budget for fiscal 2017-18.
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