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18 June, 2017 12:24:20 AM / LAST MODIFIED: 18 June, 2017 08:01:07 AM
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VAT, excise duty will put ‘pressure on low-income group’

Finance minister does not want to discuss new taxation in parliament: Akbar Ali
STAFF REPORTER
VAT, excise duty will put ‘pressure on low-income group’

Dr Akbar Ali Khan, former adviser to the caretaker government, alleged yesterday that the Finance Ministry does not want to discuss the new taxation in Parliament. “The value added tax (VAT) and excise duty will put pressure on people with low income,” he said while addressing Budget Dialogue 2017 (An analysis of the National Budget for FY 2017-18), orgarnised by the Centre for Policy Dialogue (CPD) at a city hotel.
Presided over by the CPD chairman, Prof Rehman Sobhan, the dialogue was addressed, among others, by Planning Minister AHM Mustafa Kamal, State Minister for Finance and Planning MA Mannan, former minister Amir Khosru Mahmud Chowdhury, chairman of the parliamentary standing committee of the Finance Ministry, Dr Abdur Razzak, MP, the coordinator of sustainable development goals (SDG), Abul Kalam Azad, former finance secretary Siddiqur Rahman, vice-chairman of the NCC Bank, ASM Mainuddin Monem, distinguished fellow of the CPD, Debapriya Bhattacharya, and Prof Mustafizur Rahman.  The executive director of the CPD, Dr Fahmida Khatun, made a presentation on the dialogue.
 Akbar Ali said that in Bangladesh the Finance Minister prepares the budget under the direction of the Prime Minister and there is no role of other ministers.
 The former adviser to the caretaker government said law makers and ministers have no scope for in-depth discussion on the proposed budget in the House.
 He congratulated the Finance Minister for announcing a big budget for the next fiscal, having an outlay of Tk. 400,266 crore.
 He, however, raised questions about the financing and quality implementation of the budget.
 Budget spending should be a matter of discourse in the House, but it should be on the “output” from the proposed budget, he added.
 He said a 15 per cent uniform tax on all products is quite high and would affect the low-income people.
 About funds being injected into public banks, he said, basically, these banks patronise political people instead of providing service to the common man. He suggested that the public banks be privatised to stop “financial injection” over the years.
“The financial injection of the public banks began in 1919 and continues till date,” he added.
 Akbar Ali apprehended that Bangladesh may face a debt crisis after three to five years, as the government is taking a huge amount of buyer’s credit from different sources that would have to be repaid after the grace period ends.
 What he meant was that the government would have to repay a huge amount of principal and interest of foreign credit which will put pressure on the forex reserves.
 Addressing the programme, Planning Minister AHM Mustafa Kamal admitted that there was misuse of project expenditure during implementation. However, he said they were trying to reduce the waste of public expenditure.
 Mustafa Kamal ruled out the possibility of debt crisis after three to five years. He said the government took foreign credit that was only 33 per cent of the country’s GDP size.
 About the excise duty and uniform VAT rate, he said the Prime Minister will not take decisions that would affect the common people.
 “So, I am hopeful that inconsistencies in the proposed budget will be removed. The proposed budget is implementable, pro- people and will not affect the low-income people,” he added.
 Rehman Sobhan said the actual result of the public expenditure should be the issue of discourse in Parliament.
 He alleged that private investment became stagnant and it should be addressed to achieve the growth target.
 MA Mannan said bank accounts below Tk. 1 lakh have been exempted from excise duty.
 Amir Khosru alleged that huge misuse is occurring in mega projects. The cost is increasing from time to time, and even the implementation cost is higher compared to India, China and Malaysia.
 He said the real income of the people had fallen by eight per cent during last few years, and private investment is quite stagnant due to political instability over the years.  The Bangladesh Nationalist Party (BNP) standing committee member and former commerce minister alleged that efficiency of ministries to implement the budget had decreased.
 Dr Debapriya Bhattacharya identified three shortcomings of the budget: it cannot create a private investment friendly atmosphere, it will fail to increase employment generation, and the finance ministry cannot play a leading role among the major ministries to implement the budget.  The CPD’s distinguished fellow said there is very little scope for enhancing the delivery efficiency of this budget. One will have to get the political economy right in this regard.

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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