Finance Adviser favours taxation digitalisation

Finance Adviser Dr Salehuddin Ahmed said on Tuesday that he wanted digitalisation of the tax payment system to stop corruption in revenue collection.

"We will digitalise the system so that taxpayers do not need to meet the tax collectors. They make underhand dealings whenever they meet face to face," he said.

The adviser was speaking at a pre-budget discussion with members of the executive committee of the Economic Reporters Forum (ERF) and other economic reporters who cover financial issues, at Bangladesh Secretariat in the capital.

ERF President Doulot Akter Mala led her team and submitted 28 recommendations for consideration in the upcoming fiscal budget. ERF General Secretary Abul Kashem and a few other members also spoke.

In her opening remarks, Ms Mala suggested attaching the topmost preference to restoration of economic stability rather than focusing on Gross Domestic Product (GDP) growth in the next budget.

The government should also take effective steps for market management and break the syndicates involved with supply chains and stop all forms of extortion, she said.

The finance adviser said some mid-term and long-term measures would remain in the next fiscal budget.

"We are preparing budget keeping in mind the inflation, employment generation, macroeconomic stability, and private sector investment," he said.

"This year some duties and taxes will be rationalised," he said.

The adviser said presently the government was reviewing the annual development programme (ADP). "We will lay emphasis on projects that create local employment instead of mega projects which I call monument projects."

He said the projects were not the smallest -- they involved Tk 5.0 billion to Tk 6.0 billion and the projects were related to infrastructure, river management, etc.

Moreover, he said, education, health and social safety net would get importance in the next budget. "We will raise allowances for disabled people and women to some extent but that won't be four to five times as we don't have much resources."

Asked whether the government will make the exchange rate fully market-based as per IMF's suggestion, the adviser said it was not certain that it would be possible by July next. "Because, if we make exchange rate flexible all of a sudden, things may turn out to be like what happened in Pakistan and Sri Lanka."

However, he said, the act would make sure that each and every depositor of banks get their money back, once a bank goes for closure.

The adviser said in the next budget the subsidy for fertiliser and power would exist. "The subsidy we provide to farmers is not high."

Speaking on the occasion, Chairman of the National Board of Revenue Abdur Rahman Khan admitted that the rate of value added tax needed to be lowered. "If we can enforce a single rate of VAT, then we will bring the VAT rate at a rational level in some sectors.

At the meeting the ERF proposed the VAT rate at 7.0 per cent.

Mr Khan said the NBR in the future would go for realising wealth tax that presently city corporations, municipalities, and union councils realise.

Finance Division Secretary Dr Khairuzzaman Mozumder said in the revised budget of the current fiscal year the ADP was cut to Tk 2.16 trillion from the original allocation of Tk 2.65 trillion.

Despite the cut, a big sum remained unutilised and many ministries were failing to take money, he said.

syful-islam@outlook.com