CPD suggests green tax

Mustafizur Rahman, executive director of Centre for Policy Dialogue, speaks at a pre-budget press briefing in Dhaka yesterday. Uttam Kumar Deb, additional director and head of research of the think-tank, is also seen.

The Centre for Policy Dialogue has suggested the government impose green tax on all polluting industries to encourage establishment of effluent treatment plants (ETPs) to check environment hazards.
“Industries may also be provided with soft loans for pollution control and prevention measures. This may be done through support from Equity and Entrepreneurship Fund (EEF),” Mustafizur Rahman, executive director of CPD, told a press briefing at its office in Dhaka yesterday.
The private think-tank put forward a set of proposals for the 2010-11 budget.
CPD said the next national budget is "very important" from the perspective of recovering from the impact of global recession, curbing inflation, and above all -- increasing power and energy supplies to support faster growth in medium and long terms.
“It's also important for the government to deliver on its promises it made earlier,” said Mustafiz. “If FY 2009-10 has been the year of preparation, FY 2010-11 will be the year of delivery.”
He said the government made many promises and drafted different policies, including public private partnership (PPP), to reach the targets for advancing the economy.
CPD proposed that investment in energy generation should be prioritised with special emphasis on implementation of the power and infrastructure projects in the annual development programme (ADP).
Stressing the need for realisation of objectives under PPP, it recommended preparing a list of top 100 projects with action plans for ensuring timely completion of all the on-going projects.
The support to different industrial sectors to help them combat the recession fallout should be continued, CPD said.
To check inflation, it favoured continuation of zero tariffs for imports of essential commodities.
The CPD predicted that the next budget would be of Tk 132,000 crore with a deficit expecting to be 5 percent of GDP in the backdrop of the need for increased public expenditure to accelerate growth, higher allocation for subsidy to offset the negative effects of soaring prices of commodities, including fuel, on the global market.
Besides arranging foreign grants, funds from non-banking sources can be mobilised to meet such deficit, it suggested.
It also proposed a rise in income tax collection, popularising online submission of tax returns with tax form having an in-built tax calculator to facilitate self-assessment.
It stressed enforcement of the use of electronic cash registrars (ECR) at medium and large commercial entities and maintenance of import duties on finished products at 25 percent.
CPD however opposed any provision for legalising undisclosed income in the coming budget.
“This type of facility has been given in the present budget. But, in reality, this facility has not become effective,” said Mustafiz.
CPD recommended fund for refurbishing the existing power plants, establishing liquefied natural gas (LNG) terminals and providing soft loans to the commercial entities seeking green energy.
The research organisation also suggested floatation of bonds and sector-wise mutual funds to develop infrastructure.
It also proposed introduction of insurance scheme for agriculture and livestock and incentives for establishment of cold storages for potato, vegetables and fruits. A temperature-controlled storage facility should be created in the country's all international airports to preserve life-saving drugs and vaccines, CPD suggested.
Pointing to the increased cost of doing business by entrepreneurs for running generators, CPD proposed that the government defer charging the raised tariffs for power to industrial and commercial units.
“This decision should be deferred considering the cost for generating power from alternative sources,” said Mustafiz.
Labour-intensive light engineering, plastic, melamine and electronics industrial units should come under EEF coverage, CPD recommended.
Utam Kumar Deb, CPD's additional director and head of research, also spoke.