June 4, 2016 - 10:45pm
The finance minister, AMA Muhith, at a post-budget press conference on Friday said that frantic drives to reach the huge revenue target would be undertaken before the beginning of the next financial year.
Muhith, who unveiled on Thursday a lofty revenue projection of Tk 242,752 crore including Tk 210,402 crore from the NBR-portion for financial year 2016-17 in his budget speech, asked revenue officials to take vigorous strategies to achieve the target.
‘Revenue generation activities will start from June, as I have got some plans,’ Muhith replied to a question on rationale and mechanism of proposing and generating the huge revenue.
‘I urge all revenue officials to undertake operations and make it a success,’ he said at the press conference at the Osmani Memorial Auditorium.
The overall revenue estimate is 36.84 per cent higher than the revised target for the outgoing financial year while the target of Tk 203,152 crore for National Board of Revenue, which accounts for 86.67 per cent of the total revenue projection, is 35.43 per cent higher than the revised target.
The finance minister said he deliberately framed the ambitious revenue estimate, given the ‘potential of the economy, strength of the revenue board and skills of taxmen.’
Venting frustration over the performance of the revenue board, Muhith said their performance was worse in FY 2016, as the board in July-March period managed to achieve only close to 16 per cent growth year on year. The revised budget, as a consequence, was forced to downsize the estimate from Tk 176,370 crore to Tk 150,000 crore for the revenue board.
‘The situation would be different in the upcoming fiscal year, as tax offices were established in 96 upazilas, tax laws were made business-minded, and NBR got skilled manpower,’ Muhith said.
‘I have been the finance minister for the last seven years of the ruling party. I know who the good officials are. I have got confidence in their abilities.’
At the beginning of the press conference, Muhith said Bangladesh already became a middle-income country. The formal declaration on the graduation is expected to be made by the United Nations in 2018, he added.
Responding to another question, Muhith said the provisions of money whitening with high tax and penalty had long been in place and would remain unchanged till the last day of this government.
Muhith said apparel sector would not be affected due to the proposed rise in their tax at source, as their corporate tax was lowered to 20 per cent from 35 per cent
in the proposed budget.
He defended the proposed imposition of 5 per cent supplementary duty on mobile phone SIM from the current 3 per cent.
Muhith slammed the Bangladesh Nationalist Party when he was asked whether the proposed budget was ‘reactionary’ in nature as termed by BNP. He said neither BNP nor BNP chairperson Khaleda Zia now held any status in the political arena.
‘Say about Begum Zia, or BNP –it is not a party at all right at this moment,’ Muhith said.
Hailing his government, the finance minister said development activities were going ahead, as the allocation for annual development programme increased now to above Tk 1 lakh crore from Tk 22,000 crore in seven years.
Replying to a question of fledgling private sector investment in the economy, said it seemed things got changed in the past one year and a half with the improved political situation.
‘Both local and foreign corporate investors keep rushing to invest in our growing economy as people rejected the culture of strike, blockade and political destruction,’ Muhith said.
‘Labours seldom wish to enjoy leave, they want work. They are the real strength of our economy.’
Addressing another question, the finance minister said the revenue earning would increase manifold with the increase of peoples’ income levels in a ‘reinvigorated economy.’
He said the finance ministry was working on launching a contributory pension scheme that would need some more time to come into being.
Asked why the government had reduced kerosene and diesel prices much lower than those of petrol and octane, Muhith said the issue was a matter of energy and mineral resources ministry.
He said any future step on adjusting fuel prices must be taken carefully, given the ‘volatile’ crude prices in the global market.
The finance minister on Thursday proposed a budget outlay of Tk 340,605 crore for FY 2017 with a deficit financing of Tk 97,853 crore, estimating an ambitious revenue income and resolving to increase the gloomy investment appetite.
The budget proposed in parliament appeared aggressive towards mobilising domestic resources, slapping new and enhanced taxes on both start-ups and wealthy population, and leaving the corporate sector unaffected.
The briefing was attended by planning minister, commerce minister, information minister, and secretaries for finance division, economic relations division and internal resource division, among others.
The planning minister, AHM Mostafa Kamal, said the country’s employment generation was right on the track as ‘two crore’ people were employed every year.
He noted that a recent survey by the Bangladesh Bureau of Statistics based on one quarter data could not give actual picture of the country’s employment.
Brushing aside criticism about poor investment and gross domestic products ratio, Mostafa Kamal said often such ratio did not work for achieving higher growth.
The investment-GDP ratio was not very high in the developing countries like Malaysia and Philippines, he said.
He noted that the 7.05 per cent GDP growth calculated in the outgoing financial year became possible because of substantial rise in utilisation of technologies that improved the economic outputs.
Commerce minister Tofail Ahmed ruled out that the proposed budget was ‘reactionary’ as called by BNP joint secretary general Ruhul Kabir Rizvi.
Tofail said the budget proposed huge fund for the social protection and such budget should not be called reactionary, rather it was progressive.
He said the scope for amendment to the budgetary proposals was still there if they were not consistent with the policy for safeguarding the local industries.
He said the present government would not take any duty measure that might hamper the local industries.
Information minister Hananul Haq Inu hailed Muhith for proposing an ambitious budget.
Inu said economic indicators ranging from export to reserve and private investment were improving following the stoppage of destructive political programme by BNP in the past one year and a half.
Agriculture minister Matia Chowdhury and state-minister for finance MA Mannan were also present.
Matia said prices of vegetable and fruits became affordable after the present government ensured grains at reasonable price in the past several years.