Economists and professionals at a roundtable discussion on Sunday said that Bangladesh needed to increase its tax-GDP ratio, which was currently very low compared with that of neighbouring countries and stressed the need to reform the existing taxation system.
They also discussed high inflation rate, fair income distribution in the country at a pre-budget discussion on 鈥楬ighlighting Income Tax, VAT, Customs duty, Sector-wise allocation of Budget, external debt, etc鈥� organised by Institute of Chartered Accountants of Bangladesh at Karwanbazar in the capital Dhaka on the day.
Ahsan H Mansur, executive director of Policy Research Institute of Bangladesh, said that global inflation was still very high, which affected the world economy.
鈥楪lobal geopolitical tensions will continue and it will take at least six months or more for the global inflation rate to lower. We should keep that in mind before preparing the next budget,鈥� he said
He said that failure to adjust direct tax played a vital role in unfair income distribution, adding that the tax administration should be made more efficient.
鈥楾he next budget should be prepared with the fourth industrial revolution in mind and the ways in which we can face climate challenges in the upcoming years,鈥� he added.
Shamsul Alam, former state minister for planning, said that Nepal had 17.49 per cent tax-GDP ratio, Sri Lanka 10.6 per cent and Pakistan even had higher tax-GDP ratio than Bangladesh鈥檚.
鈥楾ax-GDP ratio has direct relationship with foreign direct investment. With a higher ratio, we could attract more foreign investors to the country,鈥� he said.
He highlighted the need to improve the taxation system saying that the country would be able to increase expenditure on social protection, education and health sector.
The taxation system should be digitised so that there is no opportunity of underhand deals. Also, tax on fundamental commodities, such as agricultural items like rice and potatoes should be exempted,鈥� he added.
ICAB president Mohammed Forkan Uddin said that the National Board of Revenue should be integrated with other departments and organisations.
鈥楤y the end of 2023, the tax revenue was 7.8 per cent of our GDP, which is very low. Raising tax revenue is tricky. Government should address the irregularities affecting tax revenue,鈥� he said.
He also said that to stabilise prices of essential commodities, special audit on certain companies engaged in business of such items should be performed.
Former president of ICAB Md Humayun Kabir moderated the session with other experts and professionals present at the discussion.