Widening tax net, bolstering base crucial in new budget

Casting wide tax net and bolstering it base would be prime concern in the next national budget to ramp up the tax-GDP ratio, said speakers at a meet here Monday.

Mentioning that the budget is in a 'difficult time', they said the government would have to address fiscal policy for the graduation preparation alongside infusing measures to check domestic and international shocks.

The discussants said the budget also should prioritize issues like impact of climate change, digital economy, reducing tax exemptions and so.

Also, the experts suggest, the budget in the making will have to address the foreign-debt buildup.

Their wide-ranging views and recommendations on Bangladesh's economic and financial milieus came at a roundtable titled 'Budget 2024-25: Key Considerations for Strategic Sectors', organised by Policy Exchange Bangladesh in a city hotel.

Speaking at the event, CEO, Institute of Chartered Accountant Bangladesh, and Former Commerce Secretary Subhashish Bose alerted that "increasing further indirect tax amid growing inflation would adversely affect the poor".

He also emphasised digital taxation system, incorporating coordination approach among departments and ministries in and out of the National Board of Revenue (NBR).

Chairman and CEO of Policy Exchange Bangladesh Dr M Masrur Reaz, moderating discussions, said foreign-debt burden for the first time in the country is exceeding $100 billion, and against the debt growth, capacity of repayment including export earning or remittance inflow remained inadequate.

"In this situation it is now a question if the next budget should be high-growth targeting or not," he told the meet.

Mr Reaz also feels there is no alternative but increasing revenue income significantly along with major cuts in the volume of existing tax exemptions.

Managing Director and President of ACI Agribusiness and Machinery Division Dr F.H. Ansarey said the budget should address climate-change crisis by way of improving food-value chain and mechanization and digitisation in agriculture at all levels.

He urged the government to introduce fiscal measure to bring about "precision agriculture".

President of Bangladesh-Thai Chamber of Commerce and Industry Shams Mahmud urged the government to review the existing benefits provided for FDI, some of which are "discriminatory" to local investors.

Country Manager of Mastercard Bangladesh Syed Mohammad Kamal urged the government to introduce subsidised support for digital shopping to promote digital economy.

President of BACCO and Managing Director, Digicon Technologies, Wahidur Rahman Sharif requests the government to continue tax breaks for the sectors which have been enjoying the facility.

Director Legal, RSA, and Corporate Affairs at Nestle Bangladesh Ltd Debabrata Roy Chowdhury urged the NBR to address anomalies in the taxation system for which their business is hurt.

Deputy Managing Director of Picard Bangladesh Limited Amrita Islam made a call for providing flat-tax benefits for all export-earning sectors.

Vice President, the Association of Asset Management Companies & Mutual Funds (AAMCMF) Waqar Choudhury presented a list of recommendations that include green-field investment, increasing public- sector companies on the capital market and minimising tax gaps between listed and non-listed companies.

Former Member (Income Tax Policy) of the National Board of Revenue Apurba Kanti Das said the country's tax collection got stuck in a "vicious cycle".

He blamed lack digitisation of the NBR for not increasing the tax-GDP ratio.

Former Member, VAT, National Board of Revenue, Abdul Mannan Patwary said the existing VAT act has many anomalies and these should be removed.

Among others, Managing Partner of Snehasish Mahmud & Co. Snehashish Barua, former Vice-chancellor of Bangladesh Agricultural University (BAU) Lutful Hassan and Associate Editor (Head of Business and Economy) of Daily Samakal Zakir Hossain also spoke.

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