Larger tax net needed to achieve revenue target

CPD dialog on proposed budget

Speakers at a dialogue on the national budget 2016-17 yesterday suggested the government to expand the tax net and modernise the collection system to meet the revenue target.
They said if the tax net is not widened and strengthened the collection would remain low forcing the government to go for bank borrowings.
Centre for Policy Dialogue (CPD) organised the dialogue in a city hotel to analyse the proposed budget for 2016-17 fiscal. Most of the discussants at the event said the fiscal targets set in the budget are unrealistic.
All of them criticised the government for poor implementation of the annual development programme (ADP) but supported initiatives that would help the local industries to grow.
Finance Minister Abul Maal Abdul Muhith on June 2 unveiled the national budget of Tk 3.41 trillion for fiscal 2015-16, where revenue collection has been set at Tk  2.43 trillion out of which the NBR would contribute Tk 2.03 trillion. The highest amount of Tk 727.64 billion has been projected to come from Value Added Tax (VAT) – which is 35 per cent higher than the current budget figure.
A revenue collection target of Tk 642.62 billion was set from VAT in the initial budget for the current FY, but it was later downsized to Tk 539.13 billion in the revised budget.
Identifying the mobilisation of the targeted revenue as a major challenge, CPD Executive Director Professor Mustafizur Rahman who made a keynote presentation on the proposed budget said the government should bring some reforms in the financial sector for implementation of large budget.
Rahman said that the quality of fiscal planning has been deteriorating over the last five years, which is likely to continue in 2016-17 fiscal years.
According to CPD, the high revenue target and the absence of clear guidelines in achieving that improving efficiency of spending may lead to messing up in achieving the budgetary target. “All major parameters of fiscal framework will need to register higher growth rate to attain the targets Speaking on the occasion as the chief guest, Planning Minister A H M Mustafa Kamal said all the macro-economic indicators give clear indication that proposed budget is implementable.
“We’ve set a goal, and we know the problems and ways of solutions . . . so we are confident that we can implement the budget,” he said.
Criticising the proposed budget, BNP leader and former commerce minister Amir Khasru Mahmud Chowdhury said investment is the key component of the growth, but for the last few years the private sector is showing reluctance to investment in the country, which forced the public sector to increase its investment.
He said the government has failed to bring reforms in the financial sector that’s why the sector lost dynamism.
State Minister for Finance and Planning M A Mannan said that formulating a budget is one thing and implementing the budgetary plan according to the budget is another. “You all have to understand that implementing a project as per the budgetary plan is involved with lots of factors.”
Mannan said that the country is burdened with ‘jungle of rules and regulations’. “Those rules and regulations were formed to create accountability and for the betterment of the government institution. Those rules however now appear as hindrances against quick implementation of project.”
Replying to the remarks of BNP leader and former Commerce Minister Amir Khasru Mahmud Chowdhury about the low rate of private sector investment, Mannan said: “Bangladesh is on the development path and the government is still investing on energy and infrastructure. After some times, suitable situations will be created for the private investors to come.” Abdur Razzak, Chairman of the parliamentary standing committee on ministry of finance said that the government alone is not responsible for delaying the implementation projects of the ADP.
“Sometimes, a project implementation got delayed because of the delay in fund release by the development partners which they do without any apparent.”
“We have to understand that the development partners are not above political motivation,” he said.
Moderated by the CPD Board Member, M Sayeduzzaman, academicians, bureaucrats, businessmen, politicians and representatives of stakeholders took part in the dialogue.

Larger tax net needed to achieve revenue target

CPD dialog on proposed budget

Speakers at a dialogue on the national budget 2016-17 yesterday suggested the government to expand the tax net and modernise the collection system to meet the revenue target. They said if the tax net is not widened and strengthened the collection would remain low forcing the government to go for bank borrowings. Centre for Policy Dialogue (CPD) organised the dialogue in a city hotel to analyse the proposed budget for 2016-17 fiscal. Most of the discussants at the event said the fiscal targets set in the budget are unrealistic. All of them criticised the government for poor implementation of the annual development programme (ADP) but supported initiatives that would help the local industries to grow. Finance Minister Abul Maal Abdul Muhith on June 2 unveiled the national budget of Tk 3.41 trillion for fiscal 2015-16, where revenue collection has been set at Tk 2.43 trillion out of which the NBR would contribute Tk 2.03 trillion. The highest amount of Tk 727.64 billion has been projected to come from Value Added Tax (VAT) which is 35 per cent higher than the current budget figure. A revenue collection target of Tk 642.62 billion was set from VAT in the initial budget for the current FY, but it was later downsized to Tk 539.13 billion in the revised budget. Identifying the mobilisation of the targeted revenue as a major challenge, CPD Executive Director Professor Mustafizur Rahman who made a keynote presentation on the proposed budget said the government should bring some reforms in the financial sector for implementation of large budget. Rahman said that the quality of fiscal planning has been deteriorating over the last five years, which is likely to continue in 2016-17 fiscal years. According to CPD, the high revenue target and the absence of clear guidelines in achieving that improving efficiency of spending may lead to messing up in achieving the budgetary target. All major parameters of fiscal framework will need to register higher growth rate to attain the targets Speaking on the occasion as the chief guest, Planning Minister A H M Mustafa Kamal said all the macro-economic indicators give clear indication that proposed budget is implementable. Weve set a goal, and we know the problems and ways of solutions . . . so we are confident that we can implement the budget, he said. Criticising the proposed budget, BNP leader and former commerce minister Amir Khasru Mahmud Chowdhury said investment is the key component of the growth, but for the last few years the private sector is showing reluctance to investment in the country, which forced the public sector to increase its investment. He said the government has failed to bring reforms in the financial sector thats why the sector lost dynamism. State Minister for Finance and Planning M A Mannan said that formulating a budget is one thing and implementing the budgetary plan according to the budget is another. You all have to understand that implementing a project as per the budgetary plan is involved with lots of factors. Mannan said that the country is burdened with jungle of rules and regulations. Those rules and regulations were formed to create accountability and for the betterment of the government institution. Those rules however now appear as hindrances against quick implementation of project. Replying to the remarks of BNP leader and former Commerce Minister Amir Khasru Mahmud Chowdhury about the low rate of private sector investment, Mannan said: Bangladesh is on the development path and the government is still investing on energy and infrastructure. After some times, suitable situations will be created for the private investors to come. Abdur Razzak, Chairman of the parliamentary standing committee on ministry of finance said that the government alone is not responsible for delaying the implementation projects of the ADP. Sometimes, a project implementation got delayed because of the delay in fund release by the development partners which they do without any apparent. We have to understand that the development partners are not above political motivation, he said. Moderated by the CPD Board Member, M Sayeduzzaman, academicians, bureaucrats, businessmen, politicians and representatives of stakeholders took part in the dialogue.