Business leaders on Monday said that structural changes in the revenue sector and predictable long-term policies were imperative to ensure both local and foreign investments as well as to drive economic growth for addressing the ongoing economic challenges in the country.
At a post-budget panel discussion organised by the American Chamber of Commerce in Bangladesh in the capital Dhaka, they said that the key concern was the outdated methods of revenue collection by the National Board of Revenue, which had remained unchanged for the past 50 years.
Nihad Kabir, a former president of Metropolitan Chamber of Commerce and Industry, Dhaka, said that structural changes in revenue determination, tax policy, and budget implementation were crucial.
Despite current challenges, this is an opportunity to pursue regulatory reforms, address inefficiencies and improve performance deficits, she said.
鈥楻egarding the budget, we need to address the over 300 projects that have gone overtime and are now at risk of cancellation, which we can no longer afford,鈥� Nihad said.
Federation of Bangladesh Chambers of Commerce and Industry president Md Mahbubul Alam urged the government to ensure predictable long-term policy support for attracting local and foreign investments.
He said that to attain the target of revenue collection announced in the proposed budget, the government would have to increase the tax net instead of harassing the existing taxpayers.
The country鈥檚 informal sector is very big and if the government can make it formal one, a huge amount of revenue will be generated from the sector, the FBCCI president said.
He also emphasised the need for uninterrupted supply of quality gas and electricity for the industry to boost the foreign currency earnings.聽聽聽聽
Dhaka Chamber of Commerce and Industry president Ashraf Ahmed said that the government had announced budget at a challenging time, but aimed to address inflation and stabilise the economy.
The real-term expenditure in the budget has been reduced, which should help curb inflation, he mentioned.
Ashraf also said that there were minor issues in the budget, such as increased taxes in certain areas, but the overall direction was positive.
He underscored that the current economic environment presented a good opportunity for investments due to low valuations.
M Masrur Reaz, chairman of the Policy Exchange of Bangladesh, said that there was a notable focus on predictability in the proposed budget, with a 28-per cent income tax rate projected to remain stable for five years and a 30-per cent tax on high-income earners, but allowing undisclosed money to be formalised at a lower rate undermined regular taxpayers.
He said that the budget鈥檚 tax revenue targets appeared unrealistic given the current economic situation and expected shortfalls.
The budget could have done more to directly address the impact of inflation, Masrur said.
Former NBR chairman Muhammad Abdul Mazid said that despite having potentials, the country鈥檚 revenue collections remained lower over the decades due to the inefficiency of the NBR.
He said that the proposed budget increased the burden of indirect tax, which would not help to curb inflation.
Mazid underscored the need for separating tax policy formulation and implementations, saying that it was contradictory that the NBR formulates policy and it also implements the policy.