'High income individuals and organizations do not pay their due taxes; there are maybe 100 people who pay a personal tax over Tk1 crore, whereas the true number should be at least 50,000'
The Bangladesh Economic Association (BEA) has proposed that the government design a Tk12,16,400 crore budget for fiscal year 2018-19, saying the revenue can be significantly increased by tapping into new sources of tax, capturing black money and minimizing tax evasion.
The budget recommended by the BEA is two-and-a-half times higher than the government’s likely budgetary outlay of Tk4,60,000 crore for the upcoming fiscal year.
The budget set by the government in the last fiscal year was Tk4,00,000 crore, considered highly ambitious at the time.
The economists’ association suggested that 81% of the proposed budget (Tk9,90,000 crore) could come from the government’s revenue, while the rest of the budget deficit would be filled up from public-private partnerships, the bond market, sales of national savings certificates, and loans from domestic banks.
“There will be a basic qualitative transformation in the income structure of the budget,” said BEA President Prof Abul Barakat at a press conference held at the capital’s National Press Club on Saturday.
“According to our proposed budget, 77% of the government revenue will be realized from direct tax, while 33% will be collected from indirect tax,” he added.
The economists siad that their proposed budget will not require any foreign loans, explaining that they prefer the country to be free of debts with interest.
“High income individuals and organizations do not pay their due taxes; there are maybe 100 people who pay a personal tax over Tk1 crore, whereas the true number should be at least 50,000,” the budget proposal said.
“Currently, around Tk70,000 to 80,000 crore is being laundered out of the country per year, and the government must take steps to resolve this issue,” said BEA General Secretary Jamaluddin Ahmed.
Speakers at the conference estimated that Tk30,000 crore could be recovered by preventing money laundering and Tk25,000 crore from the recovery of black money.
They recommended allocating Tk2,64,805 crore for the education and technology sector, citing development in education as very important for Bangladesh’s graduation from a least developed country (LDC) to a developing one.
The BEA proposed allocating Tk84,950 crore for the health sector, Tk72,600 crore for the social security and welfare sector, Tk2,52,300 crore for the electricity and gas sector, Tk1,28,700 crore for the transport and communication sector, and Tk600 crore for foreign debt with interest.
BEA General Secretary Jamaluddin Ahmed said: “There are 2.6 million unemployed people in the country according to official estimates. But we have found 17.5 million jobless people in the country.”
He stressed for job creation for all the unemployed youths in the country, which would help not only enhance GDP growth but also socio-cultural development.
To make the youth fit for jobs, Jamaluddin urged the government to take necessary steps for training.
“To this end, we should bring changes in education and training process and the government as well as the state have to take the responsibility,” he added.
To ensure employment for all unemployed youth, the economist also suggested formation of a National Employment Planing and Implementation Program in the budget proposal.