2nd generation reform way to go forward, economists say
The government has to initiate a number of second generation reforms in the coming budget for the fiscal year 2023-24, said a noted economist at a pre-budget discussion on Saturday.
The fiscal layout is being happened amid impact of global economic downturn, dollar crisis and so on.
"Despite all challenges, reform is the only way to go forward," said Dr Ahsan H Mansur, Executive Director of the Policy Research Institute of Bangladesh in a keynote speech.
He said the government has to undertake series of structural reform programmes in areas like banking and financial sector, trade facilitation, trade policy reform, affordable green housing for urban residents, green growth strategy, generation of renewable or green energy, etc.
"We hope, along with mobilisation of external financing the government will make serious efforts in initiating the much-desired second generation reforms," he said.
Dr Mansur made the remarks while speaking at a discussion organised by Bangladesh-Malaysia Chamber of Commerce and Industries (BMCCI) in city's Gulshan Club on Saturday.
Mr Mansur said social expenditure must be protected and increased in the next budget. The increasing debt servicing is a matter of great concern.
He also underscored equal facilities for remitters and exporters.
He said uncertainty of tax regimes is obstacles for both domestic and foreign investment. He recommended setting common bonded warehouse to promote export of leather goods in nontraditional market including Malaysia.
Planning Minister M A Mannan also spoke at the discussion as the chief guest.
The planning minister said the Russia-Ukraine war, global energy price hike, and interest rate hike by US Fed have impacted our economy.
Due to these reasons, Bangladesh Bank has taken cautionary measures in terms of import and LC opening. So, our reserve is still quite stable, he added.
He also said that as our tax-to-GDP ratio is not satisfactory and our revenue collection is also low, therefore, we have no other alternative but to increase the tax net.
He underscored the importance of tax automation, simplification of the taxation system, and the use of technology.
The minister also said agriculture, leather, light engineering, pharmaceuticals and other important sectors should get the same facilities as the RMG sector gets.
He also emphasised product diversification of our exportable items to be competitive after LDC graduation. Moreover, the next budget won't be an over-ambitious one, he added.
He said in all indices, like remittance, export, foreign exchange reserve and FDI Bangladesh's growth in the last six months was not negative.
Syed Nasim Manzur, President, Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB) said Bangladesh is gradually losing competitiveness due to gradual increase of business cost.
He urged the NBR not to burden the taxpayers instead of increasing net of tax for meeting the revenue target.
BMCCI President Syed Almas Kabir moderated the programme.
He said only 3 million people submit their tax returns every year. The number should be expanded.
He also requested to reduce corporate tax for non-listed companies and enhance the tax-free income limit for the individual from the existing 0.3 to 0.5 million considering the current inflation and cost of living.
M A Momen, Vice President of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Barrister Sameer Sattar, President, Dhaka Chamber of Commerce and Industry, Anwarul Alam Chowdhury, President, Bangladesh Chamber of Industries, Mohammad Ali Khokon, President, Bangladesh Textile Mills Association (BTMA), Dr Muhammad Abdul Mazid, Former Chairman of NBR & Adviser of SEACO Foundation also spoke among others.
Speakers of the session stressed internal resource mobilisation and digitisation or automation of the taxation system.