Bangladesh's tax-to-GDP ratio is below 10%, and Bangladesh is one of the few countries in the world with a low tax-to-GDP ratio, said the speakers at an event on Sunday.
Speaking at “Budget 2021-22; Reality and Expectations” organized by South Asian Network for Economic Modeling (Sanem), they also said that there is no time to dwell on growth. “Growth will not solve the all-existing problems. The biggest challenge in this year's budget is economic recovery.”
They also said the wealth tax and its scope are discussed every year but there is no reflection of it in reality.
The pace of digitization or other reforms are not visible in reality. As a result, the government's revenue collection is not increasing in expected ratio.
Professor Selim Raihan, of the Department of Economics at University of Dhaka and Sanem executive director said that micro, small and medium enterprises (MSMEs) have been adversely impacted due to the pandemic.
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Despite the severity of the impact, government stimulus packages for MSMEs have been inadequate although it plays a vital role in the supply chain and also creates employment opportunities.
He also said that since the budget for FY 2021-22 is going to be the second budget announced during the pandemic, policymakers should primarily focus on addressing the urgent needs that have emerged due to the ongoing crisis.
It is extremely important for the policymakers to come to terms with the reality of the current situation and acknowledge the gravity of the socioeconomic crisis that the country is currently facing, he added.
He also pointed at large trade bodies such as the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) that can do a lot for the workers on their own. “Business associations have an important role to play in this time of crisis.”
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“Unfortunately, we have seen that at this time they are more occupied with their own demands. BGMEA, one of the most established associations in Bangladesh, the second largest exporter of garments across the world, does not need to rely on government support to such a high extent. Rather, they should step forward to take on some of the responsibilities of the employees in their organization,” he mentioned.
He also said that the government needs to properly define the corporate social responsibility of the various business associations.
Prof Sayema Haque Bidisha, of Department of Economics, University of Dhaka and research director of SANEM presented the keynote paper.
