Dhaka, Jun 8 (Just News):Centre for Policy Dialogue on Friday said that the proposed national budget for the next fiscal would increase tax and VAT burden on low and middle income groups of the society while it offered benefits to well-off people.
The budget also offered benefits to people, like bank owners through reducing corporate income tax, who finance in election, CPD distinguished fellow Debapriya Bhattacharya made the comment at a press conference held at Hotel Lake Shore in Dhaka.
The Centre for Policy Dialogue in its analysis of the National Budget for FY 2018-19 has termed it as one of maintaining the status quo.
The think tank came up with the analysis after Finance Minister AMA Muhith at the Jatiya Sangsad yesterday rolled out a Tk 4,64,573 crore national budget for fiscal year 2018-19 setting the GDP growth target at 7.8 percent.
The budget is one of “status quo” because it largely reflected the economic policies and tendencies seen in the last one decade, said Debapriya Bhattacharya, a distinguished fellow of the CPD.
“The budget statement builds more on a review of the past, rather than a focus on the future,” CPD said in its analysis.
The think tank strongly opposed the government’s move to lower corporate tax rate for banks, insurance and financial institutions by 2.5 percent, saying this may lead to loss of revenues worth about Tk 1000 crore and is highly unlikely to increase liquidity.
The government has failed to give priority to needed reforms to modernise the country’s tax system, CPD said in its analysis.
The proposed budget also lacks sensitivity towards existing situations and emerging macro stresses being built up on the economy such as pressure on balance of payment and exchange rate, inflationary expectations, it said.
It also gave less attention to areas that require reforms, provided no well-crafted action plan to implement the budget and made no concrete initiatives towards strengthening of implementing institutions and oversight mechanisms.
The CPD, however, lauded a number of fiscal measures that have been taken to strengthen domestic-oriented industries and enhance revenue earning.
The think tank welcomed the initiatives on health and environmental issues proposed in the budget, including a 5 percent supplementary duty imposed on polythene and plastic bags.
It also appreciated the move to provide support to the social safety net programmes.
However, the think tank expressed concern that the anticipated (food and non-food) price pressure will fall disproportionately on low income people and worsen consumption and income inequality situation.
It also worried that lower and middle income groups would have to bear the pressure of the higher (indirect) tax.
(Justnews/ys/1420hr)
