Two-way traffic

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THE government has set an ambitious revenue growth rate of 20 percent for the next three fiscal years. It's undoubtedly true that without collecting local resources in sizeable amount, the development of a country will always remain a far-fetched dream. Such an initiative will definitely lead to the exclusion of Bangladesh's name from the list of LDCs.
Following the turmoil in the world economy, it is clearly understandable that foreign grants cannot be a dependable foundation for the sustainable growth of an economy. Among all the countries of South Asia, the rate of tax revenue on GDP in Bangladesh is relatively lower.
The improvement in revenue collection during the last decade is not bad. The government has been able to increase the number of taxpayers, and the areas of direct and indirect taxes have also been broadened. New techniques were introduced to stop evasion and avoidance. The revenue collection process has been simplified too. As a result, people have been motivated to become pro-tax minded.
At the same time, it is the government's responsibility to create confidence in the mind of tax payers that the contribution from their hard-earned money will be utilised only for the welfare of the society and the nation, nothing else. If such practice is ensured, tax payers will be directly or indirectly benefited.
But, in reality, opportunists are looting public property under the safe shelter of some immoral politicians. According to a TIB report, at least 67 percent of households are affected by the dishonest people. At a minimum, Tk.55 billion (Tk.5,500 crore) is paid yearly through bribes. It is really very frustrating for the general people that the government cannot ensure proper utilisation of public money.
Sometimes, to meet its own political agenda or to take political revenge, the ruling political party uses public funds recklessly. An example is the recent change of the name of Zia International Airport. It will take Tk.12 billion to implement it.
Many people believe that this change was neither in the manifesto of the grand alliance in the last national election nor badly needed now in public interest. To implement this change, why cannot the ruling party pay this significant amount from the party's fund instead of using public money?
In Bangladesh, we have so many things to resolve on urgent basis. Due to financial constraints, the finance minister could not declare any significant stimulus package for exporters, though this is essential to remain competitive in the global market. The government could not refund the money collected by force by the last caretaker government on the plea that they did not have any allocation in the budget. If this is true, then how could the government spend such a sizeable amount in a non-productive area?
In developed countries, both the citizens and the government are highly concerned about their own responsibilities regarding safeguarding tax money. Both the evasion of tax and the misuse of public funds are punishable offence.
A recent incident in France will give us an idea about the seriousness of people for the proper usage of tax money. Jacques Chirac was placed under formal investigation on suspicion of using Paris City Hall funds to pay for staff at his political party when he was mayor of the capital a few months back. He is accused of using council money to finance staff at the Gaullist movement, which he headed before his election as president in 1995. No one can avoid trial if s/he misuses public fund. Such a culture induces people to be tax-compliant.
Recently, the PM advised the revenue department to check the income and expense of all citizens to detect tax evasion, if any. Which department will make sure that the government will not drain out the money of the tax payers? If anyone wastes public money, which authority will try the responsible government servant for that?
The PM has said that she will remain impartial if someone is proven to be a tax evader. This does not match with the recent presidential pardon granted to the son of the deputy leader of the Parliament, who was sentenced to imprisonment for evading tax. This is a very bad precedent, which will be detrimental to the national interest!

Mohammad Zahid Hossain, FCA, is a Financial Consultant.