Finance ministers worldwide have to be thick-skinned. Tasked with the unenviable job of finding money without raising taxes isn't easy and comes more with brick-bats than bouquets. That this is his budget swan song hasn't spared him of some raucous criticism in and out of parliament. The media has been strangely aloof in budget-analysis staying to the well-trodden path of highlighting what's going to be more expensive and what's not. In an environment not conducive to open-hearted discussion Chambers are echoing the word 'challenging' offered by the Chairman of the National Board of Revenue (NBR). Mosharraf Hossain used the word to describe the road ahead in a 25 per cent increase in targeted revenue over the current fiscal. That's not to suggest chambers mean the same thing. The challenge for them suggests a general sense of disappointment. Last year, after the budget the federated chambers of commerce and industry were left with egg on their faces when literally none of their proposed changes found reflection in the budget that was signed off. It was left to the think-tank organisations such as the Centre for Policy Dialogue (CPD) to venture forth with critiques that informed at least a section of society.
Following a year where implementation of even the truncated Annual Development Plan (ADP) was poor compared to recent years, the government was able by its direct and indirect brute majority to push through Tk 150 billion (15,000 crore) plus Appropriations bill. Why such a high bill was required to tide over expenses until the end of the month hasn't been explained in terms of breakdown or necessity. All we have been told is bulk expenses have been earmarked for the information and communication technology (ICT), Roads and Bridges and the Prime Minister's Office. This after several requests for additional project costs were turned down.
Each year the Finance Minister's briefcase contains both budget proposals and a short-list of anticipated horse-trading essentials. Last year, the minister looked positively bewildered when the
Prime Minister deviated from the script by requesting a two-year postponement of the VAT Act, that was the corner-stone of the ambitious budget. She did so in accepting that some elements of the Act wore thin and there was a negative backlash not just from media but also parliament members. It was good in respecting popular opinion; bad for the economy. The National Board of Revenue was tasked with finding alternative sources for the Tk 200 billion (20,000 crore) that the VAT Act proposed to bring in and have quietly not succeeded.
The enthusiasm has obviously waned. Pre-budget, almost as if a softener, the minister disclosed his major proposals. In so doing he took a romantic element out of the equation. As the post-budget FE editorial aptly put, novelty has been passed by. For the philosophically inclined, there's been little on the subject of indeed firm steps to recover bad debt, chase those who have since absconded and measures to prevent siphoning of bank capital. There has hardly been any reference to where this budget stands in terms of the five-year plan targets. It leaves parliamentarians to be lobbied to gain further changes, mostly downwards in tax measures. And one of the major bones of contention for the private sector, the excessive discretionary power of the taxman, has been increased and widened.
That essentially leaves the horse-trading list. Tax increases have been proposed on expensive items and reconditioned vehicles whereas online commerce hasn't had any VAT imposed. Apparently, the increase suggested in the budget speech was a 'printing' error. Garments Manufacturers will now have to focus on getting sectoral proposed tax increases pulled down rather than think of further sops. And the most supported but economically silly prospect of unchanged tax in smoking products has no doubt been left as a last-ditch measure.
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