THE Finance Bill 2024 has been passed. But the budget for the 2025 financial year in its passage has retained a controversial provision that economists have always been opposed to. The passage of the bill has also failed to handle a few other issues that were considered beneficial for the economy. One among them could not be endorsed as a law that is supposed to have been changed by the time has not been attend to at all. The budget, as it was proposed on June 6, offered the immoral scope for legalising undisclosed property and assets by paying tax at a flat rate of 15 per cent without questions being asked about the sources. The proposal has been opposed as being not only unethical but also discriminatory and counterproductive. The provision has been retained, which lends a clear moral government support for holders of undisclosed money. Similar measures in the past, introduced amidst criticism, fell almost flat. The provision for the imposition of 30 per cent tax on individuals annually earning more than Tk 2.5 million has been withdrawn. The highest tax rate remains 25 per cent as before. But the increase in the highest tax rate was proposed to check against the growing income inequality. This will also dent the hopes for improving the tax-to-gross domestic product ratio, which in Bangladesh has been one of the lowest in the world.
The provision for cutting tax holiday facilities for investors in high-tech parks, special economic zones and export processing zones that was planned to generate more revenue has been dropped. The National Board of Revenue has been asked to collect Tk 4,800 billion but no change in the highest tax rate and no dispensation with tax holiday would in all likelihood harm the revenue generation goal and the projected 4.6 per cent budget deficit would need to be met mostly with borrowing from banks. What also remains worrying is that the budget has made no increase in the tax-free income threshold, especially at a time when people are faced with soaring inflation. The threshold was increased to Tk 350,000 from Tk 300,000 in the 2024 financial year. The finance minister on June 6 proposed the imposition of a 25 per cent duty on the import of cars by members of parliament, who have enjoyed the facility for 36 years, causing a huge amount of losses in revenue to the state exchequer. The proposal was automatically cancelled as the amendments that needed to be effected in the Members of Parliament (Remuneration and Allowances) Order 1973 for the proposal to be in force could not be done in time. The finance minister has said that the main objective is to bring down inflation at 6.5 per cent through this budget of contraction, but still the budget has no guideline on how to bring down inflation.
The passage of the budget has, therefore, largely retained all the ills that have been opposed to and criticised by experts. It remains largely reflective of favour for the rich and the corrupt.