FY 2024-25 Budget: Consistency in policymaking key to ensure sustainable revenue from key sectors
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Photo: Collected
Speakers at a roundtable held to discuss key considerations for economically strategic sectors in the upcoming FY 2024-25 National Budget highlighted the importance of consistency in policymaking to ensure sustainable revenue growth. The roundtable titled, “National Budget 2024-25: Priorities for High-potential Sectors,” organized by Policy Exchange, and held on May 6, 2024, brought together distinguished luminaries from both the private and public sectors, to deliberate on how the upcoming budget should fare for strategically important sectors for the economy, amidst prevalent macroeconomic issues.
Dr. M Masrur Reaz, Chairman and CEO of Policy Exchange presented the welcome remarks at the roundtable as he dissected the current macroeconomic realities and opined on ensuring pragmatic policies for both robust fiscal positions as well as for important economic sectors such as agriculture, tobacco, RMG, FMCG, digital economy and other high value industries.
He said, “Fiscal policy needs to be targeted and focused on helping high potential sector to grow and to leverage important sources of revenue growth while ensuring wellbeing of the citizens. For instance, the tobacco sector, which constitutes about 12-13% of the total domestic revenue, has one of the highest tax incidences in the world - above the WHO recommended level. However, the prices of locally manufactured cigarettes are one of the lowest in the world. In order to deter people from smoking and ensuring sustainable revenue growth, prices of cigarettes belonging to all segments must be increased.”
Moreover, the policies should reflect the government’s ambition of achieving its goal of export/economic diversification along with facilitating the growth of high potential and emerging sectors.
Dr. F H Ansarey, Managing Director, ACI Agribusiness stated, "The government must focus on three critical areas in relation to the agricultural sector: Environment and climate change, food value chain, and technology. There should be coordination between the government and private sector in addressing these issues. While the country produces enough, the problem lies with the supply chain. It is essential that the budget provides clear guidance on these matters."
Abdul Mannan Patwary, a former member of the National Board of Revenue (NBR), opined, “The NBR must make rational and realistic decisions. It is crucial to eliminate inconsistencies in the VAT Act. If the intended purposes of the laws are not being met, then there is no benefit, and they only complicate matters for the average taxpayer. Removing these inconsistencies would increase revenue collection.”
“We need to consider the poor. The government has policies aimed at reducing the risks for impoverished individuals. Many low-income people smoke cheaper cigarettes, which pose significant health risks. To discourage smoking among the poor, the price of low segment cigarettes should be increased. This is something the NBR should consider seriously,” he added.
Wahidur Rahman Sharif, Managing Director, Digicon Technologies Ltd and President, Bangladesh Association of Contact Center and Outsourcing (BACCO), called for the continuation of tax exemptions for the digital sector. He stated, "Imposing taxes on the growing digital economy will limit its potential and fall behind neighbouring countries. If local companies are not given advantage, foreign companies will seize the opportunity and thereby hinder the development of local expertise."
Former Vice-Chancellor of Bangladesh Agricultural University (BAU), Professor Dr. Lutful Hassan, said, "Our objective in agriculture should be to increase exports and reduce imports. Subsidies should be provided as much as possible."
Former Secretary of Ministry of Commerce and CEO of Institute of Chartered Accountants Bangladesh, Shubhashish Bose commented, "The tax system needs to be digitalised which will make everyone more inclined towards paying taxes. Reducing reliance on indirect taxes as much as possible will be beneficial. A coordinated plan is necessary, with a strong emphasis on digital infrastructure."
Key opinion leaders present at the discussion also included the likes of Shams Mahmud, Director, BGMEA; Shasha Denims, Managing Director, BGMEA; Syed Mohammad Kamal, Country Manager, Mastercard Bangladesh; Apurbo Kanti Das, Former Member, NBR; Debabrata Roy Chowdhury, Director – Legal, RSA & Corporate Affairs, Nestle Bangladesh Ltd. Snehasish Barua, Managing Partner, Snehasish Mahmud and Company; Amrita Islam, Deputy Managing Director, Picard Bangladesh Ltd; Waqar Chowdhury, Vice President, Association of Asset Management Companies & Mutual Funds; Sajjadur Rahman, Deputy Editor, The Business Standard; and Zakir Hossain, Associate Editor, Daily Samakal.
