Black money initiative could fail without punitive measures

Criticizing a few initiatives in the new budget as counterproductive, the South Asian Network on Economic Modeling (SANEM) has said the investment amnesty proposed for black money can become unsuccessful without any punitive measures.

“Investment amnesty proposed for black money, can be unsuccessful without any punitive measures, and due to political patronage and poor monitoring,” Sanem said in its reaction on the proposed budget. Dr Selim Raihan, executive director of Sanem, signed the statement.

Terming the budget for Fiscal Year (FY) 2019-2020 as an ambitious one, Sanem further said: “We expect clear guidelines and plans from the government how this budget is going to be implemented, given the fact that weak implementation of budget has become a norm in recent years. 

“It is important to highlight how the performance of different ministries will be improved to implement this proposed budget.” 

Praising this budget for taking a number of positive initiatives, Sanem mentioned examples such as the pension scheme for all, government employees under insurance coverage, wealth tax, additional tax on the registration fee for vehicles, incentives for remittances, and tax office in every upazila. 

“However, like in the past, there is no assessment why different positive initiatives proposed in the past budgets didn't materialize. Therefore, it is important that there is a mechanism in place to evaluate the implementation of the positive initiatives proposed in the budgets. Otherwise, many of these initiatives will remain only as words,” the think-tank said.

Commenting on the tax-GDP ratio, Sanem said that with the poor structure of the tax system and laws, it is not possible to increase the tax-GDP ratio significantly within the next couple of years, as mentioned by the finance minister. 

“Two other areas didn’t get desired attention- the much-discussed fragile banking sector and the agricultural sector, especially how the crisis in agriculture can be solved through effective government interventions,” Sanem observed.

It also recommended much higher priority and attention for the non-RMG (Readymade Garment) export-oriented sectors, instead of the RMG sector for export diversification. This issue is very critical for Bangladesh, but is missing in the proposed budget.
Sanem concluded its reaction by mentioning that it is imperative that the overall business environment of the country is improved significantly which will lead to the much-needed acceleration of private sector investment. 

“Given the current practice of slow progress of implementation and costly ventures, speedy and cost-effective implementation of the mega-projects, SEZs and other development projects under the ADP is very important. We haven't seen in the proposed budget how things are going to be different in the coming days,” Sanem said.