A parliamentary watchdog Tuesday suggested a complete overhaul of the tax sector to the finance minister, while reviewing budget proposals for the upcoming fiscal year. They suggested introducing tax holidays to all sectors and lowering personal tax rates to increase revenue collection.
“Our recommendation is continuing the facility of tax holidays. The scope should be opened to all manufacturing sectors that generate employment,” AHM Mustafa Kamal, the chairman of the standing committee, told the Dhaka Tribune after a meeting at the parliament premises.
He pointed out that the number of units enjoying tax holidays was 1,254 in the 2009-10FY. However, the number has shrunk to only 59. “This means that the tax holiday facilities are being given to some obscure sectors and should be opened to all.”
Finance ministry officials told the watchdog on the finance ministry that revenue collection fell short of the targeted Tk760bn by over Tk30bn, and that in comparison to the figure for 2009-10FY, the number of individual tax payers rose by 467,000 to stand at 2.06m.
“We have to take risks if we want to increase revenue collection from individuals. The people in Singapore pay 17% tax while we have to pay 25%. They [finance ministry] must reduce the rates and expand tax net,” the watchdog chief said.
The standing committee also hoped that most of the Annual Development Programme (ADP) for the 2012-13FY would be implemented.
“Trends show that 90% of ADP will be implemented this fiscal,” a member of the watchdog, MA Mannan, told the Dhaka Tribune. He was seconded by the panel’s chief, who pointed out that the implementation would occur despite the “anarchic political atmosphere created by [main opposition] BNP and Hefazat-e-Islam.”
Mustafa Kamal also advocated for changing the fiscal’s tenure from July-June to January-December. “ADP implementation speeds up in the last three months. But the last three months of the July-June fiscal fall in the rainy season hampering development work.”
Finance Minister AbulMaal Abdul Muhith is expected to present the budget in the parliament on June 6.
