Tax exemption or deduction authority should not be under NBR: Mashiur Rahman
He stressed the need for a thorough analysis into why the tax-GDP ratio is not increasing
Prime Minister's Economic Affairs Adviser Mashiur Rahman opined that the authority for tax exemption or deduction should not remain under the purview of the National Board of Revenue (NBR).
"This authority should be vested in a governmental body equipped to assess industrial policies and strategies, capable of offering essential support by identifying sectors with potential to bolster our industry and exports," he said at a seminar titled "Unpacking the Economic Manifesto of the Awami League: Trends and Challenges for Tomorrow's Bangladesh" held at BIDS office in Dhaka today (24 March).
Speaking as the special guest, Mashiur Rahman said, "Duty waivers require more thorough scrutiny. It is essential to assess whether production is indeed increasing due to the waivers and whether people are prioritising productivity as intended."
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He further said, "Our aim was to engage in a thorough discussion on the election manifesto, identifying any weaknesses and ensuring adequate attention to vital issues. Following today's discussion, I believe the aspirations and concerns of the people of the country are broadly reflected here [manifesto]."
Mentioning that the election manifesto represents the government's commitments and intentions, he said it is crucial to consider the desires of the people alongside governmental objectives.
Efforts should be made to incorporate the wishes and aspirations of the populace into the manifesto, he added.
Mashiur Rahman stressed the need for a thorough analysis into why the tax-GDP ratio is not increasing.
He said, "It is imperative to conduct a serious and in-depth analysis to identify the underlying factors and explore avenues for reform."
At the event, former state minister for planning Dr Shamsul Alam advocated for maintaining corporate tax rates within the range of 20-30%.
He emphasised the importance of ethical policies in tax collection.
He also proposed that the NBR should handle tax collection responsibilities, while tax policy formulation should fall under the purview of the Internal Resources Division.
"Bangladesh maintains a low tax-GDP ratio of 8%, ranking as the second-lowest in South Asia. Bangladesh's tax effort has remained stuck at a low level for several decades, even below 8% of GDP in FY21," said Sayed M Ahsan, professor emeritus of Concordia University, Montreal, and visiting professorial fellow of BIDS.
He stated that the point was duly recognised in Awami League's economic manifesto.
Binayak Sen, director general of BIDS, stated that Bangladesh should aim for a tax-GDP ratio of 15-17%, acknowledging that achieving this goal cannot happen overnight.
He suggested that gradual growth, perhaps by half a percentage point (.5%) each year, could result in a 2.5% increase over five years and a 5% increase over ten years.
Speaking at the seminar, Planning Minister Abdus Salam highlighted that the election manifesto underscores the importance of revenue collection to boost revenue management.
He said the manifesto aims for a targeted revenue growth rate of 10% to 11.1%.
